Tax Tip of the Week | No. 393 | Ten Deductions You Might Miss - Part 1

Tax Tip of the Week | February 8, 2017 | No. 393 | Ten Deductions You Might Miss - Part 1

This is Part 1 of a two part series……..Take the time to consider the following potential tax deductions. Nothing is more painful than to find out your tax refund could have been higher if you hadn’t overlooked these deductions:1.  Sales TaxesIf you itemize, you have the option of deducting sales taxes or state income taxes, whichever is greater.  In a state that doesn’t have its own income tax (Ohio does have an income tax), this can be a big money saver.  Even in Ohio, the sales tax deduction might be a better deal if you make some large purchases.  It may also help senior citizens in Ohio if they pay no city taxes and limited state taxes. Note:  you must be able to itemize to take this deduction.2.  Health Insurance PremiumsIf you pay health insurance with after-tax dollars, the premiums would be deductible after they exceed 10% of your adjusted gross income. ( Note: employer provided insurance plans will normally have the employee portion of the premiums paid in before-tax dollars.)   The big winners who can use this deduction are self-employed individuals.  They can deduct 100% of the premium cost on the front page of the tax return and do not need to itemize.3.  Tax Savings for TeachersMost teachers will pay for some classroom items out of their own pocket.  If you keep records, K-12 teachers can deduct up to $250 on their tax return. You do not need to itemize to take this deduction.4.  Charitable GiftsMost people know they can deduct money or goods given to a qualified charity.  But don’t overlook out-of-pocket expenses you may incur while performing charitable work. For example, if you bake cupcakes for a fundraiser, you can deduct the cost of the ingredients.  Also, don’t forget to keep track of your mileage while performing charitable work because the mileage can also be deducted.5.  Paying the BabysitterYou may be able to deduct the cost of a babysitter if you are paying them to watch your kids while you volunteer to work for a recognized charity. Once again, keep good records for this deduction.Please note these are very simplified examples and should not be relied upon without professional consultation.Five more to come next week!You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.Rick Prewitt – the guy behind TTW...until next week.