Most Overlooked Tax Breaks and Deductions

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Most Overlooked Tax Breaks and Deductions
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Americans overpay because they fail to take tax
deductions for which they are eligible. Lets
have a quick look at even commonly overlooked tax
credits and deductions that could be costing you
money.
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Here is what you can do to reduce this phase of
tax phobia.
1. State Sales Taxes This deduction could be
particularly important to you if you live in a
state that does not impose a state income tax.
You must choose between deducting state income
taxes or state and local sales taxes they paid.
2. Reinvested Dividends If youre like most
fund owners, you reinvest these payments in
additional shares of the fund remember that each
reinvestment increases your tax basis in the
stock or mutual fund. That in turn, reduces the
taxable capital gain (or increases the tax-saving
loss) when you redeem shares in a taxable
account.
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3. Child-Care Credit - A tax credit is much
better than a deduction it reduces your tax bill
dollar for dollar. So missing one is even more
painful than missing a deduction that merely
reduces the amount of income thats subject to
tax.
4. Out-of-Pocket Charitable Deductions - Its not
just cash donations that are deductible. Even if
you donate goods or use your personal car for
charitable work, these are potential tax
deductions. Be sure to get a receipt for any cash
donation over 250 and a detailed receipt for
the donation of non-cash goods.
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5. Deduction of Medicare Premiums for the
Self-Employed - Folks who continue to run their
own businesses after qualifying for Medicare are
eligible to deduct premiums paid for Medicare
Parts B and D plus the cost of supplemental
Medicare policies or the cost of a Medicare
Advantage plan.
6. Military Reservists Travel Expenses If you
are a member of the National Guard or Military
Reserves, you can write off the cost of travel to
drills or meetings. If you qualify, you can
deduct the cost of lodging and half the cost of
your meals, plus an allowance for driving your
own car to get to and from drills.
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7. Gambling Losses - You may be qualified to
claim a deduction for gambling losses if you were
involved in legal gambling and won money or
prizes during that tax year. This deduction is
only available to the extent of your gambling
winnings.
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Thanks For Watch
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