Filing your tax return every year can be a stressful process. There are so many intricacies to tax forms that it is almost impossible to feel confident you fill them out correctly. A big part of your tax returns are deductions, which is an expense that will reduce your taxable income. There are a ton of different types of tax deductions. Here we are going to detail several overlooked tax deductions that can save you money.
The first one of the overlooked tax deductions on our list are professional development related expenses. These include items such as learning materials, seminars, and courses. If you can explain how these expenses help improve yourself and can advance you in your role, then it can be considered self education.
Continuing your education through professional development efforts can be a great way to advance further in your career. Learning new skills can possibly get you a promotion which might mean a raise!
Work Clothes and Uniforms
Buying and maintaining your work clothes and uniforms can be expensive. This is especially true if your factor in the costs of keeping it presentable, like dry cleaning. The good news is that you can claim money spent buying or maintaining your work clothes and uniforms as a tax deduction.
If this is something that you would like to do, be sure you keep tabs on how often you do your laundry. You may need to keep receipts (which may be a challenge). That being said, if the total cost you are trying to deduct is under $300, then no receipts are necessary.
Any charitable donations that you make can be claimed as a tax deduction. Not only do you get to support a good cause, but you will be reducing your taxable income! Partnerships with nonprofits or any type of involvement with charity events may be deductible as well.
Not only do cash donations count as a deduction, but you can also deduct charitable gifts of other sorts. For instance, there are many nonprofits out there where you can donate your car, truck, or boat to. The organization will then sell it and use the funds to pay for the education of children. So, if you are in the market to buy a car, and you have your old clunker sitting around, you can donate it and get a tax deduction. You can even claim donating used clothes – just make sure you get a receipt.
If you make any charitable donations or gifts, be sure to keep any receipts. This is very important.
Pet Related Expenses
One of the most overlooked tax deductions are expenses related to purchasing a pet. However, not all pet related expenses count as a deduction. The caveat to this is that the pet needs to be used for a business, personal security, or if it is a service dog. Sadly, getting a new puppy to keep you company while you are working from home isn’t tax-deductible.
For instance, if you purchase a security dog for your business then you can claim the cost of its care as a tax deduction. Expenses that you can claim include vet bills, food costs, and everything else used for the animal’s well being.
Time to Use These Overlooked Tax Deductions
There are many ways that you can reduce your taxable income. One of the best ways is to use one or more of these overlooked tax deductions. There can be a lot of confusion around what expenses count as tax deductions. If you have any questions your tax accountant should be able to help. Note, these deductions will only help if the total amount is over the standard deduction. The best advice we can give if you do decide to use these overlooked tax deductions is to keep all of your receipts.