Boost Your 2015 Tax Refund
Although, the tax deadline for filing your 2015 taxes has been extended to April 18 this year, you have less than two weeks to go! And, if you have been procrastinating, I may have just the motivation you need.
The following are commonly overlooked deductions, expenses and credits, which will certainly Boost Your Tax Refund!
- Education Expenses: Tuition is deductible for full-time students, but even casual learners can get a tax credit. The Lifetime Learning Credit of 20% of up to $10,000 of tuition and fees is available even if you aren’t pursuing a degree.
- Job Hunting Expenses: You may be able to deduct the cost of travel, meals, resume preparation, postage, career counseling and employment agencies, to the extent that they exceed 2% of your income, even if you don’t end up changing jobs.
- Health Insurance: If you are self-employed, you can take a deduction for the health insurance premiums you pay for yourself and your family. If you are not self-employed, health insurance premiums, along with your other medical expenses, are deductible if they exceed 10% (7.5% if you are 65 or older) of your income and you itemize your deductions.
- Moving Expenses: Your moving expenses are tax deductible if you change jobs and the distance from your old residence to your new job site is at least 50 miles more than to your old job site, and you work at least 39 weeks during the year after the move.
- Party Expenses: The cost of parties are tax deductible if they are related to your business. If you rewarded your favorite customers with a party you may be able to take this tax deduction.
- Home Office: If you use part of your home regularly and exclusively to perform administrative or managerial activities for your business, you can claim a home office deduction for utilities, rent, mortgage interest, depreciation, cleaning and the like based on the square footage of your home used for your business.
- Personal Bad Debts: If your best friend borrows $10,000 from you and then skips town, you can deduct up to $3,000 of this non-business bad debt as a short-term capital loss on your tax return in the year the debt becomes uncollectible.
- Points Paid on your Home Loan: If you paid points when you bought a home, they are deductible in that year. Points paid to refinance a loan must be written off over the length of the loan. If you refinance again, don’t forget to write off the remaining points in the year you refinance.
- Mileage Expenses: If you use your vehicle for business, whether you are self-employed or an employee, you can deduct your mileage (56 cents per mile in 2014, 57.5 cents in 2015). If you work at more than one job, the cost of traveling between job locations is tax deductible as well.
- Medical Costs: The cost of exercise equipment or purchasing and maintaining a spa or swimming pool can be tax deductible as medical expenses if your doctor recommends them in writing.
- Energy Credits: Part of the confusion here is that just about every year, Congress removes or restricts this deduction, only to restore it just before the next season begins. But for 2015 you can still take a credit of 10% of cost up to $500 for windows, doors, insulation, roofs, non-solar water heaters, air conditioning and heating. You can also take a credit up to 30% of the cost of installing qualified residential alternative energy equipment, such as solar hot water heaters, wind turbines, and geothermal heat pumps.
- Education Credits: The American Opportunity Tax Credit provides a credit of up to $2,500 per student off your tax liability, if you paid for eligible college expenses for yourself, your spouse, or your dependent. There’s also the Lifetime Learning Credit that provides a credit of up to $2,000 per tax return for graduate studies and continuing education.
- Childcare Credits: You may be entitled to a tax credit if your children are under the age of 13, and require childcare. The amount of the credit ranges from 20% to 35% of up to $3,000 for one child, and up to $6,000 for two or more children. And while the credit is lower the more that you earn, it is not less than 20% no matter how much you earn. All that’s required is that both parents have to be employed or looking for a job, creating the need for the care.
Happy Tax Season!