Every year, Americans miss out on more than $1 billion in tax deductions. Here are some of the most common deductions people forget to claim. Watch the video >>
1. Noncash charitable donations:
Most people remember to write off their cash contributions, but did you know that you can also deduct noncash donations, like clothing and furniture donated to GoodWill? You can also write off expenses for charitable activities, like gas spent driving to a volunteer center, or items bought preparing for a bake sale.
2. Educational costs:
If you’re paying off student loans, you can qualify for up to $2,500 in deductions under the American Opportunity Credit. And if you’re taking postgraduate courses, you can claim up to $2,000 under the Lifetime Learning Credit.* To see if you qualify, visit www.irs.gov.
There are two key deductions that can really help small-business owners or anyone who is self-employed. The first is Social Security tax. Unlike company employees who split their Social Security tax with their employer, self-employed individuals are required to pay all of it. Fortunately, they can now write off half of it. The second is Medicare premiums and Medigap policies, which is available whether you itemize or not.
4. Unemployed or newly employed:
Did you know people looking for work can write off costs associated with their job hunt, such as travel and stamps? You can claim this deduction as long as these costs exceed 2 percent of your adjusted gross income, regardless of whether you get a new job.
*Must make under $53,000 a year to qualify.
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