Do Not Miss Out On Lesser-known Tax Breaks

Tax credits and deductions are an effective strategy filers use to lower their tax liability or increase the size of their refunds. These tax breaks exist in a broad number of categories, ranging from education and retirement to travel expenses and child care. While Americans have a number of tax breaks they can take advantage of, many miss out on the opportunity of maximizing their returns because they are unaware of how many credits and deductions exist. There are a number of lesser-known tax benefits Americans should claim during filing season.

Small business owners who employ 10 or fewer individuals whose annual wages average $25,000 or less may be eligible for a healthcare-related tax break. Under the current tax laws, small business owners who meet the employee number and income requirements, and pay at least half of their employees' health coverage, may be eligible for a tax credit up to 35 percent of what they pay in health insurance premiums. Small business owners should consult with their tax preparer to determine if they meet the qualifying criteria.

Self-employed workers may also qualify for a health-related tax break. In previous years, self-employed workers were not permitted to deduct what they spent on health insurance premiums from their self-employment tax, but only their income tax. However, current laws allow these workers to deduct these costs on both taxes. Self-employed workers should also determine if they qualify for a home office deduction. The rules related to this deduction are very specific, so it's important to seek advice or meet with a tax professional before claiming the benefit.

For example, the government requires that self-employed workers claiming a home office deduction use the space 'regularly and exclusively' for work purposes. Additionally, the filer must prove that the home office is his or her principal place of business. Workers who qualify may be able to deduct expenses relating to utilities, mortgage interest, insurance, repairs and depreciation.

Travel expenses related to certain activities may also be deducted if they meet certain conditions. For example, workers who are constantly visiting clients may deduct meal, hotel and travel expenses associated with their business trip. Additionally, job seekers who are looking for a position in the same field they were previously employed in may deduct the travel and transportation expenses when they go on interviews.

Consumers are urged to speak with their tax preparers about the deductions and credits for which they may be eligible. Tax breaks can help families improve their financial condition during filing season by reducing their tax bill or increasing how much they receive back.

By: Liberty Tax Service

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Liberty Tax Service provides a computerized income tax preparation service and electronic tax filing. Each tax office offers customers audit assistance, a money back guarantee, and free tax return checking.