Secret Tax Deductions Revealed!

It’s tax time again, and in the spirit of getting every penny back that you can, be sure to use the ten tips below.

1. Automobile expenses incurred driving to and from medical procedures.

You can deduct 19 cents per mile driven to doctor’s offices, hospitals, out-patient care facilities, etc., if the mileage isprimarily for, and essential to, medical care” (according to the IRS). You can deduct mileage whether you drive yourself or your dependents. Remember to keep scrupulous mileage records throughout the year.

2. Part-time workers’ commuting expenses

If you have to work more than one job, there are more benefits than you may realize. Commuting expenses for full-time workers are not tax deductible, but if you work more than one job, the mileage driven from one job to the other is tax-deductible, and is considered a legitimate business travel expense. For 2011, the mileage rate has risen to 55.5 cents per mile.

3. Charity work expenses

Not only do you get a tax break on monetary and material charitable donations, you can deduct your travel mileage as well. In addition to deductible hotel and airfare, you can deduct 14 cents per mile driven to and from volunteer work. But there’s more. If a child is in your care as part of charitable work, that child’s food and entertainment costs are deductible.

4. Business entertainment costs

You can deduct 50 percent of the cost of taking customers out for a meal. But if you have a “working lunch” at your office, you can deduct 100 percent of the cost. Also taking your clients to a ball game or play, 100 percent of the cost is deductible. Use a business credit card to keep easy track of what you spend and where you spend it.

5. Energy-efficient home appliances

Use the following forms for renewable and efficiency credits: IRS Form 5695; for alternative motor vehicle credits: IRS Form 8910. Also download instructions for form 8910. For qualified plug-in electric drive motor vehicle credits: IRS Form 8936. Save your receipts, or make copies of them, and the Manufacturer Certification Statement for your records.

6. Parental support 

Caring for an aging or ill parent? You might qualify for a medical expense deduction. If your parent(s) have too much income on their own to qualify as a regular dependent, but you provide more than 50 percent of their support, any medical expenses that you pay for can be tax deductible. The expenses must exceed 7.5 percent of your Adjusted Gross Income (AGI) to qualify.

7. Personal bad debts

If you lent money and didn’t get it back, you may qualify for a tax deduction. There are restrictions: You must be able to prove that the money was a loan and not a gift, and you must claim the bad debt on your tax return to offset any investment capital gains.

8. Personal travel

If you conduct any business while you’re on vacation, keep all receipts. You can claim the expenses on your tax return. Whether you only talk business with a new acquaintance, exchange business cards or check up on the competition, you’re conducting business and it counts.

9. Private Mortgage Insurance

If you put down less than 20 percent when you bought your house, you’re probably paying private mortgage insurance (PMI) to protect the lender in case you default. This used to be non-deductible, but a new law passed last year changed all that. Now you can deduct your payments along with your mortgage interest. This only applies if your mortgage was issued since 2006, and the full deduction is for homeowners with an income of $100,000 or less. If you make between $100,000 to $109,000, you get a partial deduction.

10. Hobby deductions

If you make money from your hobby, you can deduct many related expenses up to 100 percent of your hobby-related income.

One thought on “Secret Tax Deductions Revealed!

  1. Pingback: Top Ten Posts of 2012 | Denver Office News

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s