5 Tax Deductions to Remember if you Itemize

There are certain deductions that most Schedule A tax payers fail to recognize because of misunderstanding or lack of knowledge. Depending on how you get your taxes done, you might not be aware what you can or can’t itemize.

I will talk about 5 itemized deductions that you should remember every year as they don’t change much and can help you reduce your tax liability.

Personal Property

Most people overlook this deduction because it is vague. Let me ask you this, did you pay a fee to renew your vehicle registration? If you answer is yes then you have a deduction. In California we refer to it as DMV fees. Any amount you pay to renew you vehicle registration can be deducted as personal property tax.

Further reading: Deductible Taxes

Job Search Expenses

Even if you were lucky enough and didn’t lose your job last year, I am sure you were job hunting. Most people with jobs and of course without jobs spend money on job search. Some examples would be paying membership fees to placement agencies, getting your resume critiqued for a fee, attending paid career workshops, driving to interviews and last but not least, buying clothes for interviews. As long as your expenses exceed 2% of your AGI, it will benefit you to deduct them.

Further reading: IRS Publication 529, Miscellaneous Deductions

It’s amazing to me how many people don’t take advantage of non cash donations. Not to throw you off here but when we tax accountants talk about non cash donations, we are talking about items you donate to Goodwill. Most of us, including people who don’t itemize donate some sort of goods every year to either Goodwill or some other organization. Whether you leave your items on the curb side or personally walk into a store and donate it, I can’t emphasize how important it is that you get a signed receipt that is in your name and properly dated. If you have receipts, you can deduct up to $5000.

Further reading: IRS Publication 526

Charitable Miles

If you are doing a lot of charity work, it makes all the sense to deduct miles. If you are volunteering at any charitable organization, you can deduct round trip mileage from your house to the charity. Current rate is 14 cents for every mile you drive, the rate has changed in over a decade. You have to keep a log if you want to take this deduction, assuming won’t help.

Further reading: IRS Publication 526

Tax Preparation Fees

Most taxpayers think that you can deduct tax preparation fees only if you paid a tax professional to get your taxes done. That is not true. According to the IRS, you can “include the cost of tax preparation software programs and tax publications.” You can also include any additional fees you paid to e-file your tax return. Just so that we are clear here, if you paid for Refund Anticipation Loan to get your refund fast, that fees is not deductible.

Further reading: IRS Publication 529

The information presented above is general information and might not pertain to you. If you have a specific question, please use the comments section below.