11 Tax Deductions You’re Probably Not Taking Advantage Of
It really doesn’t matter if you’re running your own biz #girlboss style or climbing the corporate ladder while your partner crushes it as a stay-at-home dad: There’s no avoiding paying up to Uncle Sam this April. But surprisingly, more things than having a baby or buying a house can get you a tax break. To help you avoid the common tax mistake of overpaying, TurboTax expert Lisa Greene-Lewis clues us in to 13 expenses that you can actually write off this tax season.
1. Start-Up Costs: If 2016 was the year you made your self-employment dreams a reality, there might be some expenses you can write off. Greene-Lewis clarifies, “If you have a newly formed side hustle, you may be able to deduct start-up costs, including legal fees, cost of experimentation, advertisements, and even office supplies like copy/print paper, printer ink, and pens.”
2. Driving for Lyft or Uber: “From the moment you leave your driveway to start driving in search of your first passenger until you drop off your last passenger and return home, your total business miles are deductible for up to 54 cents per mile. That’s why it’s important to count every mile so you can save (or earn) more money,” explains Greene-Lewis. “Now, obviously if you squeezed in a personal errand or two, those miles don’t count. You also may be able to deduct your actual expenses like gas, repairs, tires, oil, and your lease payment based on the portion of your business use of your vehicle — if you don’t take the standard mileage deduction.”
None of us mere mortals will ever understand what ittakes to make all of our fave blogs run smoothly, but for the digital ladies bringing us the best content, you could be in for some serious refunds. “Running a website often means paying for hosting, the domain name, and possibly privacy services,” Greene-Lewis prompts. “You can deduct these expenses to keep your blog or website going.”
4. Travel: Wouldn’t it be great to get tax deductions for your vacations? Unfortunately, not all travel is created equal in the eyes of the tax code. But Greene-Lewis shares some good news: “You may be able to deduct qualifying non-reimbursed employee expenses for business trips. To determine whether you can deduct an expense on your tax return, you must meet two requirements: Your duties require you to be away from your regular place of business substantially longer than an ordinary day’s work, and you need sleep or rest to meet the demands of your work while you’re away. Common expenses include transportation costs, tolls, and lodging.” (Remember, this is just for your own out-of-pocket costs. If your employer picked up the tab or paid you back, you can’t double-dip on those expenses.)
5. Cleaning Out Your Closet: “If you donated your unwanted items to charity, you may be able to get a tax deduction. To take a deduction for property donated, it must be in usable condition, and you must establish its fair value. For most clothing and household goods, that’s the thrift shop value,” Greene-Lewis points out. “You’ll also need an acknowledgment from the charitable organization where you made the donation if your donation is over $250.”
6. Learning Something New: If education was a point of emphasis for you last year, all that learning could help pay for itself in a big way! “If you attend a qualifying trade school or college, you may be able to claim the American Opportunity Tax Credit or the Lifetime Learning Credit,” reveals Greene-Lewis. “The American Opportunity Tax Credit is up to $2,500 credit per student in their first four years of college, and the Lifetime Learning Credit is worth up to $2,000 per tax return and can be taken whether you are considered a full-time student or are only taking one class.” Greene-Lewis clarifies that you cannot claim the American Opportunity Tax Credit in the same year you claim the Lifetime Learning credit, because the IRS only allows one education tax credit per student, per year.
7. Volunteering: While you can’t get a deductible for your time spent, if you purchased any supplies for the charitable organization, clocked in miles to help the charitable organization, or donated money during the year, according to Greene-Lewis, those all could be deductible. Check with your tax professional if you’re not sure if the organization you volunteer with qualifies.
8. Moving: “If you moved for a new job and your new job is at least 50 miles farther from your old house than the distance between your old house and your old job, you may be able to deduct the costs associated with your move, including the cost of moving you and your stuff, storage, and even travel,” Greene-Lewis tells us.
9. Getting in Shape: Saving cash money by hitting the weights? Talk about workout motivation! “If you worked to drop excess pounds last year, you may be able to deduct certain weight-loss medical expenses — like gastric bypass or visits with the nutritionist — if prescribed by a doctor to mitigate or prevent disease,” observes Greene-Lewis. “Even the cost for commercial programs like Weight Watchers can be deducted, provided the program is prescribed by a doctor.”
10. Getting Out of Debt: While there’s no tax deduction for consumer debt like credit cards, if you have a student loan or mortgage, you’ll want to look into deducting your interest payments. Greene-Lewis reveals, “You can deduct interest paid not only on your home’s mortgage, but also on a second mortgage, a line of credit, or a home equity loan. If you have a student loan, you may be able to deduct up to $2,500 in student loan interest.”
11. Investing Wisely: If you spent a little cash learning how to make a little cash, what you spent on those resources might be deductible.“The cost of financial publications and financial advice may be tax deductible as miscellaneous deductions on your tax return,” notes Greene-Lewis, as long as your miscellaneous deductions total more than two percent of your income.
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