Last year taxpayers lost out on almost one billion dollars in deductions. Many dental practices were among those taxpayers who missed out. Here are 12 of the most common deductions that were left unused.
State Sales Tax Deduction
Many dental practices reside in states that collect sales tax. Your practice has the ability to deduct the amount you pay in-state sales taxes from your income tax. If your business resides in a state that does not collect sales taxes, this deduction would not apply.
Charitable Expenses Deduction
When you pay out-of-pocket expenses to contribute to charity, the amount you pay qualifies you for a deduction. Up to 60% of adjusted gross income can be deducted from your taxes. Expenses such as lodging, traveling, and meals accrued while contributing to charitable causes are deductible.
Student Loan Interest Deduction
Provided you are not claimed on another person’s taxes as a dependent — and why would you be, you run your own dental practice — you are eligible to deduct the interest that you paid on your student loans. If somebody is paying the loan on your behalf however, it does not disqualify you for this deduction.
Moving Expenses Deduction
When setting up a new practice after graduation, if you traveled more than 50 miles you are qualified to deduct expenses related to moving. Often relocation expenses include movers and transportation expenses.
Employment Search Deduction
When looking for new employment, the costs related can be deducted from your income taxes. Often these expenses include employment agencies, resume building, and traveling expenses. Even if you didn’t get a job offer expenses can be deducted.
Child Care Deduction
Parents who get expenses from child care costs can deduct those expenses from their taxes. Usually, these expenses pile up during the summer — but especially in these times.
Mortgage Refinancing Points Deduction
If you buy a home you can deduct from your taxes the points paid to get the mortgage. Refinancing an existing mortgage can also be deducted but they are done so over the entire period of the loan. By paying the loan off early you are able to deduct any remaining points as well.
Deductions on Home Equality and Line of Credit Loans
Anytime you take a home equality loan to make capital improvements you qualify for a deduction. As long as you make improvements to your home with those funds you may qualify for this deduction.
Lifetime Learning Credit Deduction
If you are taking college credits to further your education, then you can claim this deduction. Anyone in your household who is enrolled at an institution accruing tuition fees enables you to qualify as well.
Child Care Credit Deduction
A working parent can deduct up to $6,000 through their employer’s reimbursement account. In some situations, the maximum credit is only $5,000 from reimbursement accounts directly.
Child Tax Credit Deduction
If you are a taxpayer with a child you are able to obtain the credit deduction of $1,400 for every child.
Lost Deduction From Past Tax Years
Perhaps, you overlooked taking advantage of a deduction from a past tax year. Talk to your accountant about prior tax years. Most likely you are still are eligible to receive deductions.