Having just a few days left to file 2015 personal income tax can be quite stressful. It’s easy to miss and forget important deductions so here’s a short list of some that you may not think about, but can save you some money. There are many more deductions I don’t mention but the idea is to get you thinking about all that happened to your income and expenditures last year and how to keep most of your money.
Moving expenses – these expenditures are often triggered when changing employment. You may be able to reduce your tax burden by deducting expenses such as truck rental, moving supplies, utility deposits at the house, or lodging while in route. One important test: the new job has to be at least 50 miles further away from your old home than your previous job.
Expenses related to a job search – getting a new job doesn’t only require investment of time but also in tangible items. A simple trip out of town can cost you gas, lodging and meals. As always there are some rules:
– the job has to be in your current field
– you are not looking for a first job
– you cannot take a deduction if there was a substantial break between the last job you held and when you started looking for a new job
List all the expenditures on Schedule A for Miscellaneous Deductions. To determine the amount of deduction, first they must reach 2% of your Adjusted Gross Income and you can deduct amounts over that threshold.
Health insurance premiums – since introduction of Affordable Care Act more individuals than ever have had health insurance. Many of them are self-funding it and the good news is that the premiums can be deducted from the adjusted gross income. Whereas there are some rules when health insurance is sponsored through the employer and premiums you pay are pre-tax, self-employed Americans can deduct the entire premium amount and don’t even have to itemize it.
Home office expenses – if you run a business from home make sure that you deduct your operating expenditures that correspond to the area used by your home office. Calculate what percentage of total square footage is dedicated to your business and use that portion of utility bills and maintenance expenditures toward your deduction.
Education related expenses – college students can deduct up to $4,000 for tuition and other school related fees. If you’re claimed as a dependent, you may not qualify to take this deduction. Another deduction to keep in mind is interest paid on student loans. Unfortunately it’s capped at $2,500 for does not apply if your AGI is $80,000 when filing separately or twice that amount when filing jointly.