By: admin , Jason Redman//April 7, 2016
By: admin , Jason Redman//April 7, 2016//
As April 18 is approaching, hopefully you’ve already filed your tax return or extension. But if you haven’t, the time to act is now. The IRS anticipates 20-25% of individuals wait until the last two weeks to start preparing their return, so below are 10 overlooked items that could benefit you as you complete your return.
Single parents may file as head of household
If you are single at the end of the year and had a dependent child (or other dependent) living with you for at least half the year, you may qualify for lower tax rates by claiming head of household as your filing status rather than single.
Collect overpaid Social Security tax if you worked for more than one employer
If you worked for more than one employer, each took Social Security taxes out of your paycheck based on what they paid you. If you had more than $7,347 in Social Security taxes withheld, you may claim a refund of the excess on your return.
Home business expenses
If you run a business in your home, you may be entitled to deduct the cost of your office and equipment. Special rules apply to prevent you from deducting personal expenses, but you shouldn’t forego legitimate deductions because of this.
Don’t report a state tax refund as income if you took the standard deduction
State taxes are deductible, but if you get a refund you usually have to report it (or a portion of the refund) as income in the following year. This is not the case if you used the standard deduction and didn’t receive the “tax benefit” from the taxes that were refunded to you.
Don’t overlook medical expenses
Of course you may deduct insurance premiums, doctors’ fees and hospital expenses, as long as they were not covered by insurance. But did you know that you may deduct items that are not normally covered by health insurance, such as glasses and transportation and lodging related to out-of-town medical procedures?
Don’t forget all your charitable contributions
Are you active in various organizations and incur small out-of-pocket expenses? Keep your receipts and if your contribution totals more than $250, you can write-off those out of pocket expenses. Also, if you drove your car for charity in 2015, remember to include 14 cents per mile, plus parking and tolls paid.
You can deduct investment fees
Total your investment fees to see if you can deduct the expenses related to financial planning, investment advice, subscriptions to investment publications, safe deposit boxes and other items related to your investments. You need to exceed 2 percent of your adjusted gross income (together with job-related expenses and other miscellaneous deductions) to qualify for this deduction.
Remember to deduct return preparation fees
Whatever you paid to have your tax return prepared last year also is deductible and should be included with your miscellaneous expenses as you strive to exceed 2 percent.
Hopefully you tracked those job search costs
If during 2015 you were looking for a position that was in the same line of work as your current or most recent position, some of the costs you incurred can be included with miscellaneous expenses and potentially deductible. Some of the expenses that are deductible include costs of printing resumes and business cards, employment agency fees and transportation expenses including mileage, parking and tolls.
Don’t forget to include your child care expense
You can qualify for a tax credit worth between 20 and 35 percent (depending on your tax bracket) of what you paid for child care while you work but the total expense used to calculate the credit is limited to $3,000 for the care of one qualifying individual or $6,000 for two or more.
Hopefully these 10 items will help with getting started (or completing) your 2015 tax return. If you need further assistance, any of our professional staff would be willing to help.
Jason Redman, CPA is a manager at Mengel, Metzger, Barr & Co. LLP. He may be reached at [email protected].