5 Federal Tax Deductions You Should Know About
Overpaying taxes? You may be interested in learning about 5 overlooked federal tax deductions you can claim. If you qualify for these deductions you may be able to reduce your tax liability by thousands of dollars.
Here is our overlooked tax deductions list:
- Out of Pocket charitable contributions - it’s hard to miss out on claiming the big money donations you give out. You must know that you can also claim the out of pocket costs you incur.
For example, you can claim ingredients bought for a soup kitchen, gifts to kids at a shelter or the cost of stamps you buy for your school’s fundraiser.
Also, if you drove your car for charity in 2015, remember to deduct 14 cents per mile.
- Moving Expenses to take your first job - You get to write off all moving expenses when you relocate to take a job, even if you don’t itemize your deductions.
You have to move more than 50 miles to qualify. You will be able to write off transportation costs, shipping of your household goods and even a retaining storage unit for 30 days.
- Refinancing mortgage points - you get to deduct the points over the lifetime of the loan. So if you paid $5,000 in points for a 10 year loan, you get to claim $500 every year.
When you sell the property you get to claim the unused portion all at once.
- State tax paid last year - If you owed money on your 2014 tax return to the state and paid it in 2015, you get to claim that amount on your itemized deductions.
This amount is in addition to all state taxes withheld from your paycheck or any estimated tax payments you made.
- Student loan interest paid by Mom and Dad - If Mom and Dad pay back the student loan, the IRS treats it as though they gave the money to their child, who then paid the debt.
So a child who’s not claimed as a dependent can qualify to deduct up to $2,500 of the student loan interest paid by Mom and Dad.
Savings on taxes helps build your wealth faster. For more tax deductions consult your tax professional or reach out to OTA Tax Pros. Start saving on taxes today!