The bad news is that you’ll probably be kicking yourself after reading this if you’ve already filed your taxes. The good news is that if you’ve filed for an extension, you still have time to take advantage of these deductions. With that said, here are ten tax deductions you probably missed this year.
10. Pet Owners
Bet you didn’t know there was a tax break for pet owners, did you? Don’t feel bad. We didn’t know either until recently. Unfortunately, it only applies to active-duty members of the armed forces. If this is you, and you’re moving because of a permanent change of station and want to bring your pet(s) along with you, you just might be able to deduct the cost of shipping them. You just need to make sure that your move meets IRS requirements.
9. Bad Habits
If you’re trying to kick a bad habit, such as smoking or overeating, you may qualify for a deduction. Participating in a smoking cessation program can be considered deductible as a medical expense. Included in that deduction is the cost of prescription medications used to treat nicotine withdrawal.
And, there’s good news for those of you folks who are participating in a weight-loss program. Before we continue, however, we must note that this deductible is NOT for people who are merely out here trying the latest diet fads. This benefit is actually for people who’ve been diagnosed with a disease by a physician and they’re participating in a weight-loss program to combat that disease.
8. State Sales Tax
Did you know you can include state sales tax as a deduction? This is especially true for those of you who live in a state that doesn’t impose an income tax. For example, if you made a big-ticket purchase, such as a car, boat, airplane or home building materials, you can add the state sales tax you paid to the amount shown in IRS tables for your state (NOTE: The IRS has tables that show how much you can deduct.). You just need to make sure that the sales tax rate you paid doesn’t exceed your state’s general sales tax rate.
7. Job Hunting Expenses
If you’ve paid out a considerable amount of money in outplacement agency fees and sending copies of your resume in the mail, you can deduct some of those costs. It’s best to gather all necessary information from the IRS first as there are certain rules you’ll need to follow. One such rule is that you CANNOT deduct these costs if you were looking for your first job. Ironically, you CAN deduct any moving expenses related to getting that first job–but there’s just one catch. You have to be in the military and your move has to be due to military orders.
6. Professional Dues and Licensing Fees
The bad news is that this deduction was eliminated in 2018. The good news is that you can still claim professional dues and licensing fees incurred prior to 2018–if you have yet to file. And, if you’ve paid dues and fees to a professional organization or a union, they can be deducted from your taxes up to and including 2017.
Some other things to keep in mind:
-You can deduct costs associated with passing a licensing exam or certification, provided that your employer has not already reimbursed you for these fees.
-Make sure you itemize the dues and fees you report on Schedule A of Form 1040 or you will not be able to claim the deductions.
5. Jury Duty Fees
There are two things you need to keep in mind when it comes to jury duty fees: 1) The IRS requires you to report those fees as taxable income, and 2) Some employers require you to hand over your jury duty fees to them. If you work for such a company and you have to give your jury duty fees to your employer, you have the right to deduct that amount when filing your taxes. That way you won’t be taxed for money that you didn’t get to keep.
4. Student Loan Interest
Most of you know that this deduction can be claimed. But, did you know that you can get a deduction for student loan interest paid by your parents? Yep, it’s true! If your parents pay back your student loan, the IRS looks at it as a gift given to you by your parents, so, as long as you can’t be claimed as a dependent, you can qualify to deduct up to $2,500 of that student loan interest.
FYI, if you’re still in school you might be able to deduct some of your college-related expenses by claiming the lifetime learning credit. This credit lets you deduct up to $2,000, provided your income does not exceed certain limits (e.g. $66,000 for single filers and $133,000 for married couples filing jointly in 2018). Keep in mind that you’ll need to file Form 8863 to claim the credit.
3. Pregnancy Test Expenses
Believe it or not, you can include the amount you paid for a pregnancy test in your medical expenses when filing your taxes. You can also include the costs of breast pumps and other supplies in your medical expenses after you give birth. But, that’s not all. Pregnant women can also deduct the costs of tests that ensure the good health and proper development of the fetus as well as the costs of getting to and from their doctor’s appointments. In fact, there are quite a number of deductions that can be claimed. Check with your CPA to make sure you take full advantage of all that are available to you.
Did you know that the purchase of a wig can be considered a tax deductible medical expense? According to IRS Publication 502 (2018), Medical and Dental Expenses, the IRS says that “you can include in medical expenses the cost of a wig purchased upon the advice of a physician for the mental health of a patient who has lost all of his or her hair from disease.”
It’s important to note that you CANNOT deduct the cost of the wig if you’ve already been reimbursed by your insurance provider. It’s also important to note that you will not get the benefit if you take the standard deduction. And, for itemized deductions, you’ll only be able to take total medical costs that are greater than 10 percent of your adjusted gross income if you are under age 65 or 7.5 percent of your adjusted gross income if you are age 65 or over.
1. Car Registration
If you live in California, Michigan or any other state that assesses an annual fee based on the value of your car, you can include the amount paid in your itemized deductions. To do so, you must itemize them using Schedule A on the line for “personal property taxes.” Even if your state doesn’t refer to the fee as a personal property tax, the IRS still considers it a deductible personal property tax as long as the fee is annual and is based on your car’s value.
Are you a tax professional who has knowledge of other little-known deductions? Feel free to share them with us in the comments below. Thanks!