Huge Tax Deductions that People Rarely Use At the end of every tax season there are people who wish they could have done more to qualify for additional tax breaks, but the truth is that these same people more than likely already have done enough to qualify for huge and common tax deductions but simply forget or forgo their use. With billions of dollars in unutilized tax deductions every year across America, those who are taking advantage of the many tax deductions available to them are getting more of their money back in their tax returns. Tax experts and tax lawyers will be able to further help those who are in trouble with their taxes or who are on shaky ground with the IRS, but there are many things that everyday people can utilize to receive greater tax deductions. One of the first and best tax deductions that people across the country miss out on year after year are non-cash charitable donations.
Charitable Donations The ironic thing is that most people know that they can receive a deduction on their taxes for donations to charity but still do not take advantage of the tax credit offered for doing so. Perhaps one reason why people continue to forgo their rightful tax deduction on charitable donations is because they simply forget that they have donated. This may sound odd, but how many people mark down the cost of clothing that they have giving to thrift stores and second-hand stores such as Goodwill, Savors, or the Salvation Army on their tax deductions? The answer is far fewer than who donate, that is for sure. So even though some may think that it is not worth the few extra bucks they would receive back for donating their unwanted clothing to a second-hand store and getting the request receipt to prove one’s donation, the reality is that such donations do qualify for tax deductions and people still fail to claim it. Another common tax deduction that many utilize while still many others neglect is the deduction on healthcare costs.
Qualifying for Deductions As with all tax laws, there are specific regulations and requirements that qualify a person to receive a tax deduction equal to their medical expenses, but in general there are two ways for a person to deducted healthcare costs, including healthcare insurance premiums, from their owed taxes. The first way to qualify is if one is self-employed and not covered by a policy from an employer, in which case a full one hundred percent of one’s health insurance premiums and health care costs can be tax deductible. The second way to qualify for health care tax deductions on premiums is if the medical expenses for a person over the fiscal year exceed seven and a half (7.5) percent of the person’s adjusted gross income. If one qualifies in either of these two ways then it should be relatively easy to deduct health insurance premiums from their taxes. These are simply two of the many tax deductions that people routinely miss out on, but there are many, many more such as deducting the points on a home refinance, the points on an old home refinance, personal costs incurred in a business, and plenty of others. This year, take the time to learn all you can about the different tax deductions you qualify for and start receiving the money that is yours. Getting the tax help you need can ensure that you get every penny you’re entitled to. Photo Credit: Alan Cleaver, 401(K) 2012