15 Tax Deductions Many Consumers Overlook (Part I)

The U.S. Federal Tax Code is one of the most complicated systems on the planet. With thousands of laws, rules, and regulations that apply to American taxpayers, it can be difficult to stay on top of everything. You may have heard that American consumers left roughly $1 billion on the table in unclaimed deductions and credits last year, and this was mostly because of the difficulty in researching everything for which they may be eligible.

To help better prepare your 2013 taxes, here are fifteen deductions you should be aware of, because chances are you may qualify for at least one or two of these:

Moving Expenses: Did you relocate to change jobs last year? If you meet the time and distance tests, you may be qualified to deduct your moving expenses. You must have moved at least 50 miles and have worked full-time for at least 39 weeks out of the first 12 months living in your new location. If you meet these requirements, you can deduct certain costs related to looking for a new job in the field you presently work in, and relocation to your new job.

Dependent Costs for Parents: With the aging Baby Boomer population, a growing number of Americans are receiving senior care. If your parent qualifies as your dependent and you are footing the bill for their in home elder care, you may qualify to deduct expenses associated with their care provided you send a 1099 or W2 to the caregiver or senior care agency.

Child Care Credit: A credit can be claimed for expenses you paid to a childcare provider to care for your kids while at work. If you run the expenses through a reimbursement account offered by your employer, the maximum deduction is $5000. However, if you spent more than the $5000 allowed through your employer, you can claim up to an additional $1000 of credit, for a total of $6000. Do not forget about child summer day camps; costs for these camps may also be included as a childcare expense.

Points to Buy a Home or Refinance your Mortgage: Most consumers are aware that they can deduct home mortgage interest if they itemize their tax deductions. However, many are unaware that you can also deduct the points you pay on a home loan, whether on a new home purchase or refinance. This can often provide several thousand dollars in additional deductions.

Expenses Related to Charitable Work: Direct financial contributions to churches and charities and even items donated such as vehicles and clothing are usually claimed by taxpayers. However, many often forget about the expenses they incurred while doing charitable work. For example, if you are a bell-ringer for the Salvation Army, you can deduct $.14 per mile for miles driven to and from your designated ringing location.

In Part II, we will discuss state taxes, student loans, and widowed spouses.

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