As you e-file federal taxes, you want to make sure that you are getting all of your deductions. The IRS has stated that millions miss out on savings through missing items from a very simple list of deductibles, and Kevin McCormally of Kiplinger.com wrote an article to help those who e-file federal taxes not to lose out on possible savings.
Do You Qualify?
McCormally starts by assuring his readers that they don’t necessary need to hire an accountant. They just need to look over a list of deductions and judge if they qualify for certain breaks. Among other deductibles, he lists multiple expenses that may qualify e-filers for savings.
Deductions for Business
Business expenses have been recently given some more tax breaks. Make sure when you e-file federal taxes that you check and see if you qualify for tax breaks on your business. Some possible deductions include 100% of your advertising costs, 50 cents per mile for business –related driving, banking fees, gifts bought for customers or clients, and postage. Depreciation can also be counted under Section 179. This allows a business to deduct up to $250,000 a year the expenses of depreciating assets such as machinery. Also, if you primarily use your home office for business or regularly meet with clients there, you can subtract utilities, insurance and even depreciation for that portion of your home. Finally, you can deduct up to $5,000 of startup costs when you e-file. Federal taxes have been giving many breaks to business owners.
Deductions for Education
Also, McCormally lists education costs for those who e-file. Federal Taxes can count many educational costs as deductions. Whether tuition interest, school book purchases, other every day expenditures related to your education, they can all be can be usually be counted. Specifically check out the “American Opportunity Credit” which gives more help to the majority of students than the former Hope credit. Also, check out “Coverdell Education savings Accounts.” These special accounts allow the owners to deduct income tax free as long as it’s put toward educational expenses.
Deductions for Job Related Expenses
Many people also don’t know that even if you work for an employer and do not own your own business, you may still be able to write off job related expenses when you e-file federal taxes. Some of these expenses include a required cell phone, union dues, class-room supplies if you are a teacher, up to 50% of client entertainment fees, home office expenses, and commuting costs to a temporary job site. You can also deduct the costs of a computer used more than 50% of the time for business and the payments to a former employer for breach of contract.
Deductions for Medical Expenses
Finally, look into if you qualify for any medical breaks; there is a very long list of medical deductions that you may qualify for. Some of the possible deductions include buying a guide dog, outfitting a car with necessary medical features, acupuncture, child birth classes, health insurance premiums, vision correction surgery, pregnancy test kit costs, and even non-prescription drugs! A patient can even subtract travel expenses to when he commutes to get medical treatment.
In this economy, it’s good to know some of the expenses we can use to our advantage. While the above list is by no means comprehensive, it shows that with a little investigation taxpayers can save a lot on expense-related deductions as they go to e-file federal taxes.
