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Tax Deductions You May Qualify For

With January gone, and February well under way, itق€™s time to start thinking about that dreaded time of the year: tax time. No one likes to see their hard-earned money taken away from them, but paying taxes is a necessary evil. Fortunately, there are a number of tax credits available that can help you to keep more of your own money.

Student Loan Interest Paid by Parents

In most cases, the only person who can deduct interest is the person who is responsible for paying it. However, this is not the case with student loan interest. As far as the IRS is concerned, student loan debt belongs to the student, regardless of who is paying it back. So, if your parents are the one footing your college tuition bill, you can still be the one who gets the deductions. You can deduct up to $2,500 of interest every year, but you cannot be claimed as a dependent to do so.

Job Related Moving Expenses

If you are moving to take your first job, you can deduct the expenses incurred during that move. In order to qualify, you have to be moving more than 50 miles from your old home. So long as you meet this requirement, you can deduct the travel expenses, as well as tolls and parking fees, incurred driving from your old home to your new one. In 2016, the mileage rate was 19 cents per mile. In 2017, the new rate is 17 cents per mile. The best part is that you donق€™t have to itemize.

Jury Pay to Employer

Jury duty is a civic duty, one that often requires you to miss work. Many employers will still pay your full salary, despite the fact that you arenق€™t at your normal job. However, there is often a catch to this: you have to turn over the money you earned as a juror to the company you work for. Despite the fact that you donق€™t get to keep this money, you still have to report the earnings to the IRS as taxable income. Fortunately, you are able to deduct the cost of those fees that were turned over, so you arenق€™t taxed on money that you technically never received.

State Taxes Paid the Previous Year

You have taxes deducted out of each and every one of your paychecks, so having to pay more in taxes is nothing short of aggravating. However, if you owed, and paid, state taxes last year, be sure to add that amount to your state-tax deduction (along with taxes withheld from your paychecks) on your new return.

Refinancing Your Mortgage

Normally, when you take out a mortgage to buy a house, you get to deduct the points paid to get that mortgage all at once. If you refinance your loan, the points are evenly distributed over the life of the loan, and you deduct them as such. For instance, if you refinance for a 15-year loan, you can only deduct 1/15 of the total points each year. The year that you pay off the loan (either from selling or refinancing a second time), all of the points that havenق€™t been deducted yet get to be deducted.

Out-of-Pocket Contributions to Charity

Youق€™re probably already well aware that large donations to charity, whether they are a tangible gift, a check you wrote or a deduction from your paycheck, are all deductible. However, what most people donق€™t know is that smaller, out-of-pocket expenses are deductible as well. If you cook or bake goods for a local non-profit organization, the cost of the ingredients are deductible. So, too, are the out-of-pocket expenses incurred for a fundraiser. You can even deduct mileage if you have to drive your own personal vehicle for charity. Be sure to keep your receipts.

Taking advantage of all available deductions will help you to keep more of your money when itق€™s time to file your taxes. If you arenق€™t sure which deductions you might qualify for, donق€™t hesitate to ask. The more deductions that you can take advantage of, the bigger your refund.

and Not Even Know It