If you choose to itemize on your federal income tax return instead of using the standard deduction, every eligible expense you find can save money. Here is a list of easily overlooked deductions.
- Points paid by you on a new home loan.
- Points paid by a seller on your behalf.
- Points paid when you refinance your home mortgage (typically deductible pro rata over the life of the loan) find more.
- Remaining un-deducted points on a prior refinancing when you refinance again.
- Actual out-of-pocket expenses for a standard rate of 14 cents a mile for use of your vehicle while volunteering for a charity.
- Disaster losses not reimbursed by insurance.
- Job-hunting travel and telephone expenses.
- Employment agency and job counseling fees.
- Costs for resume preparation.
- Union or professional association dues.
- Specialized work clothing and small tools used at work.
- Fees paid for the preparation of your tax return.
- Gambling losses to the extent of your winnings.
Be aware that special rules apply to different categories of itemized deductions. For example, certain “miscellaneous” itemized deductions must exceed 2% of your adjusted gross income (AGI) before your benefit. Similarly, medical expenses are deductible only to the extent your out-of-pocket costs are greater than 10% of your AGI when you are under age 65.
In addition, overall itemized deductions may be limited when your income exceeds certain thresholds.
For a complete list of what you can deduct, contact your tax professional, who can help you get the most from your itemized deductions.