When it comes to paying taxes, almost everyone would like to reduce the amount of money that they pay the federal government. Depending on your situation, there may be ways that you can get more deductions or credits that could offset some of your tax liability. Here are six tax breaks that can help you start saving money.
1. Job Search Expenses
One of the most often overlooked deductions that people can get is their job search expenses. If you are out of work and you are in the process of looking for another job, you can deduct the expenses that you incur while searching. This could be costs for going to job interviews, resume preparation, and other items that you could incur.
2. Student Loan Interest
If you currently pay student loans, you may be taking advantage of a student loan interest deduction on your taxes. However, many people do not realize that you do not necessarily have to pay the student loan payments in order to get a deduction. According to the IRS, children who have their student loans paid by their parents can take the interest deduction as well. In their eyes, the money is being given to you and you are paying your student loans with it.
3. Real Estate Taxes
When you are itemizing your deductions, you can also deduct the amount of money that you pay in real estate taxes. This is true also if someone else pays the real estate taxes on your behalf. The same line of reasoning is used for the student loan interest situation.
4. Medical Expenses
If you have had a particularly bad year when it comes to paying medical expenses, you may be able to get a tax break from them. If the medical expenses exceeded 7.5 percent of your annual income, you can deduct anything over that. If you are self-employed, you can also deduct the cost of your health insurance premiums for you and your family. You can also deduct long-term care insurance premiums. If someone else pays for medical expenses for you, then you can also deduct those costs.
5. Dependent Care Credit
If you have kids and you pay for their childcare, you can take a credit for that. What you might not know is that you can do the same thing for elderly adults that you take care of. This makes it possible for you to get a pretty big tax break if you have dependents.
6. Volunteer Expenses
If you volunteer for a charity, you should be able to deduct the expenses that you incur. You can also deduct mileage if you drive for the purpose of charity work.
All of these tax breaks could help you save money in a big way when it comes time to pay. Make sure that you or your accountant review your finances for some of them before filing.