The Form 1040, U.S. Individual Income Tax Return, is the starting form for personal (individual) Federal income tax returns

As the tax deadline quickly approaches, it is common to be caught up in the rush and overlook some substantial deductions that can translate into high tax savings for you. There is a long list of tax deductions that you can take advantage of, but only if you qualify, and overlooking these deductions can cause you to lose money.

Below is a list of the most commonly overlooked tax deductions:

  • Home renovation deductions
  • Bad debt deductions
  • Moving expenses
  • Investment fees and expenses

Today, we’re here to take a deeper look at these deductions to make sure you are taking full advantage.

Investment Fees and Expenses

If, in the course of the year, you started earning enough income that you decided to invest a portion of the money, you most likely incurred some fees during your investing endeavors. Certain fees that you paid to manage your investments do qualify as a miscellaneous deduction. These could include:

  • Fees paid for investment counseling
  • Custodial fees that were paid outside of the account
  • Safety deposit rental fees

Moving Expenses

If you moved to a new location for purposes of work during the year, you may be able to claim the cost of your moving expenses. This deduction does not have limits, so long as you meet the eligibility requirements. While the moving expenses that you do pay yourself are deductible, the expenses reimbursed by your employer are not eligible for deduction. To meet the requirements, your new place of employment should be more than 50 miles farther away from your old home than your previous place of employment. You are required to fill Form 3903 to make your claim.

Bad Debt Reduction

If you lent out an amount of money that you never received back, this can be considered bad debt and may be eligible for a tax rebate. To deduct this amount, you must have previously included the amount as income, and must also show that the transaction was a loan and not a gift. You are also required to show that you made an attempt to collect the debt, but there is now no chance of getting the money back.

Home Renovation Deduction

Generally, home renovation costs are not tax deductible, but there a number of ways that they can minimize your tax liability. If the renovations were medically necessary, it is possible to have them deducted. These costs could include installation of ramps, bathroom modifications, widening of doors and hallways among others.

There is a chance that you are eligible for more tax deductions, and taking advantage of some commonly overlooked tax write-offs can help you to minimize your tax liability and increase your refund. The experts at Bodine Perry are ready to help. Visit www.bodineperry.com or call (855) 851-8318.

 

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