Three Of The Most Common Deductions That People Often Miss
It's depressing to know that every year, people don't take all the deductions that they can legally avail of simply because they do not know that these exist. In most cases, they only find out about these deductions soon after they have filed the return while in the middle of a chat with a friend or co-worker. This scenario is normal taking into account the number of deductions that are available and the different tax laws to take note of. The fact that people attempt to make use of absurd tax deductions makes matters both worse and depressing. This article will then discuss three of the unexplored tax deductions available to all taxpayers.
First, if you donate anything aside from cash to charity, ensure that such is duly reflected in your tax return. This includes any donations made by charging it to your credit card. You can actually claim deductions for donations made in the year the charge was reflected in your account and not when the bill was fully paid.
You must also secure from the charitable institution a written receipt of the donations that you have given to them. For charged transactions, you may also ask your credit card company to give you the needed record. Bear in mind as well that donations of actual items follow the same guideline. Hence, deciding to donate furniture and old clothes is definitely a good idea as you will be entitled to a tax deduction on this, to some degree. Just remember to get evidence that the donation was indeed made, or else, you will have no sure way of keeping that deduction. In addition, make sure that items given to charitable institutions are in good condition or the IRS won't consider this move as something that will merit a tax deduction.
You may also deduct a certain portion of the new points earned as a result of a home refinance. If on June 1st you've refinanced your home for a 20-year term, you may actually claim for deductions equal to 7 (June 1 - December 31) of the 240 months. A deduction equal to $70, or $10 for each of the 7 months, can be availed of if the new points require you to pay $2,400 for the 20-year term. In the same way, you'll be authorized to deduct $20 for each year, or until $2,400 will be completely paid.
People normally overlook taking deductions concerning their health insurance premiums simply because there are special requirements that need to be met. In reality, you can actually claim deductions for these, and even premiums for long-term care. So long as you meet certain requirements, you may make use of these to significantly lower your taxes. After which, these amounts must then be added to your medical expenses. Also, before any deduction can be enjoyed, your total medical expenses must be over $7.5% of your adjusted gross income, or AGI.
Darrin T. Mish is a Nationally recognized Attorney whose practice focuses on representing clients across the United States with IRS Problems. He is AV rated by Martindale-Hubbel and is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. He has been honored by a listing in Martindale-Hubbel's Bar Register of Preeminent Lawyers. He can be reached at his website at www.getIRShelp.com
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