Tax Tip of the Week | No. 394 | Ten Deductions You Might Miss - Part 2

Tax Tip of the Week | February 15, 2017 | No. 394 | Ten Deductions You Might Miss - Part 2

This is Part 2 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:6.  Lifetime LearningThe tax code offers a number of deductions geared toward the traditional college student. That doesn’t mean, however, that non-traditional students or those who have already graduated don’t get a tax break as well.  The Lifetime Learning credit can provide savings up to $2,000/yr. (20% X first $10,000 in qualified expenses). This credit phases out at higher income levels, but doesn’t discriminate based on age.7.  Unusual Business ExpensesIf something is used to benefit your business and you can document the reasons for it, you can generally deduct it from your business income.  A junkyard owner, for example, might be able to deduct the cost of cat food that encourages stray cats to hang around and control the mice and rats.  A professional bodybuilder got approved to deduct the cost of body oil used in competitions.8.  Looking for WorkLosing your job is traumatic, and the cost of finding a new one can be high. But if you’re looking for a job in the same field, you itemize your deductions, and these expenses exceed 2 percent of your adjusted gross income, any qualifying expenses over that threshold can be deducted. It may seem like a high bar, but those costs add up quickly – consider deducting the mileage you put on your car driving to interviews and the cost of printing resumes.9.  Self-Employed Social SecurityThe bad news about being self-employed: You have to pay 15.3% of your income for social security and Medicare taxes, the portions ordinarily paid by both employee and employer. But there's one small consolation – you do get to deduct the 7.65% employer portion from your gross income on the front page of the tax return.10.  Public Safety OfficersThe deduction is only available to retired police, fire, corrections officials, judges, etc.  They can deduct up to $3,000 for the premiums they pay for their health insurance.  They would show the total pension distribution on Line 16a of the 1040 tax return and show up to a $3,000 lesser amount for the taxable portion on Line 16b.  Write “PSO” next to Line 16b.Please note these are very simplified examples and should not be relied upon without professional consultation.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.