All of us know that we can reduce our tax liability by making use of the deductions offered by the government. The first thing to be kept in mind while filing taxes whether a man or woman is doing it, be it jointly, or single or widow(er)s or senior citizens is the standard deductions applicable. A lot of people only remember the standard deductions and they tend to miss out some other uncommon ones. So, remember to have made best use of the following deductions to reduce tax amount spent:
1. Medical travel expenses: If you or your spouse has had to make visits to the hospital due to any illness, the amount of money spent on travel can be deducted from your gross income. The expenses on travel to and from the hospital can also be claimed for your children in case of their illness.
2. Insurance premiums: Apart from helping you in times of need, insurance also helps you to claim a deduction. The deductions that are applicable for different sets of tax payers are different based on the age of the person. You need to check the IRS to get the exact deduction applicable for you.
3. Employee contribution: A certain amount of your monthly income is kept aside as a contribution to disability fund, unemployment fund and some other such social security funds. This entire contribution is eligible for deduction from your total taxable income.
4. Real estate taxes: Taxes paid on recently purchased real estate are also deductible from your income. Also, the same way, taxes paid on sale of real estate is also eligible for deductions in your total taxable income.
5. Donations and charity: Exemptions are a great excuse for you to start donating to charity apart from the feeling of doing good to the society. The expenses you incur as part of volunteering are exempt from tax payable. This even includes expenses that are spent towards travelling or other related items such as boarding or lodging.
6. Expenses made in job search: If you are hunting for a new job and you have enrolled yourself in an employment agency, those expenses can also be claimed as part of your taxable income. You can also deduct expenses from your taxable income incurred as part of travelling, lodging and preparing for your job interview.
7. Education and training expenses: In case your employer refers you to some training and you spend money on it, you can deduct this amount from your taxable income. The education cost includes cost of textbooks, stationary, course fees, lodging, meals and transportation. To be able to claim this deduction, you should already be a part of the said profession.
8. Tax related expenses: Although it might come across as a little odd, but the expenses that go towards taxes itself are also eligible for deductions. In addition to this, even the fees you pay to tax consultants to help you do your taxes are also deductible in your total taxable income. In addition to this, you can also deduct travel expenses incurred to visit your tax professional.
You would surely not want to pay a single penny extra in the form of taxes. So, remember to make best use of these deductions when you fill out your IRS form.
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