Tax season is upon us again, and for most people, that means trying to find ways to save as much money as you possibly can. There are many ways that you can take advantage of the tax breaks the federal government offers; often, it’s simply a matter of knowing what those tax breaks are. While you are probably aware of some of the better known deductions – travel expenses, for example – others are not as widely known and can be just as advantageous for both individuals and small businesses. Here are a few lesser known tax breaks to help you save a pretty penny this tax season:
Did you make any upgrades to your home this year? If so, did you take advantage of modern, energy-saving technology? If you did, you may be eligible for a tax break. For example, if you had energy efficient windows installed, this could mean a tax break of up to a few hundred dollars. Similarly, if you had a new and more energy-efficient furnace installed, you could be eligible to knock a few hundred more off of your taxes. If you’re an individual filing your taxes, take a look at part two of Form 5695 and see if you qualify for the Nonbusiness Energy Property Credit.
If you found yourself seeking a new job this year, you may be able to claim some credits related to your job hunting expenses. While there are very specific rules related to whether you can claim any tax breaks from your job hunt, it’s worth looking into. If you are looking for new employment in your current field, make sure to keep detailed records of everything you have to spend.
For example, any fees you incur for resume preparation, or for employment agencies, are potentially deductible if they exceed 2 percent of your adjusted gross income. This is certainly possible if you are not working much; just make sure to keep a detailed record of all costs related to job-hunting expenses. This includes everything from gas mileage for driving to interviews to printing paper for resumes.
Even if you graduated college a long time ago, you might just be eligible for further tax breaks if you are looking to continue your education. Whether that means signing up for one night class, or going back to class full time to earn an advanced degree, you can often write off up to $2,000 per year. This does depend on how much you have spent on further studies, and it also depends on your income, but is worth looking into as your age does not matter.
Child Care Costs
If you have children, there are a few lesser-known tax breaks you can take advantage of. For example, if you do charitable work and need to hire a babysitter while you’re doing it, you can deduct the cost of that babysitter. While you may be aware that you can deduct day-care fees while you’re working during the school year, did you know you can also deduct the cost of summer day camps once school has ended? As with all the other items on this list, just make sure to keep a detailed record of everything.
Deducting the cost of medical care can get complicated, as what deductions you can make varies widely depending on the work you do and the medical insurance you make use of. For example, if you are self-employed, you can usually deduct 100 percent of your health insurance costs. If you are not self employed, you will need to reach the AGI threshold in order to begin deducting itemized health care costs. This is easier to do if you make sure to keep track of miscellaneous costs such as mileage when traveling to doctor’s appointments.