Tax season is upon us. Again. And each year we search for tax deductions we might have missed.
Here are three commonly missed tax deductions:
1. State Sales Tax – Even if you file on Turbo Tax (TT), this deduction is not one of the first listed. Be aware that you may have to search TT for this deduction which is based on your state’s sales tax rate. It was well worth the search as I could deduct another $2,000!
2. Charitable Giving – Don’t miss out on all of these, not just the ones you receive statements for. This does, however, require a bit of record-keeping throughout the year. For 2017, keep a folder just for charitable giving. If you give to Goodwill, for example, make a list of items that you donate to keep with your donation receipt. TT will help you value these items when you file. If you drive to a volunteer event, make note of your mileage, which may be deductible. If you write a check to support your nephew’s mission trip, keep the receipt (if it’s deductible). And if you purchase items that are not reimbursed for a volunteer organization, save that receipt and notate the event. As always, check to make sure you have volunteered for an IRS-recognized charitable organization. Find more info here.
3. College Tuition Credits – even better than a deduction! You can get a credit of up to $2500 for qualified tuition expenses in 2021 with the American Opportunity Credit. This is a dollar for dollar reduction of your tax liability. And don’t neglect the Lifetime Learning Credit too!