Tax Tips: 5 Unusual or Overlooked Tax Breaks You Could Qualify For
Originally posted on https://newmiddleclassdad.com/tax-tips/
The 2017 tax bill changed the way withholdings got calculated for many people. In early 2019, that meant some people who thought they would get refunds actually had to pay the IRS money instead.
That left many people confused, especially when they found out the bill removed some popular tax deductions. The home mortgage interest deduction was a big one that people complained about.
That’s the bad news. The good news is that you can still find tax tips that will make filling easier in 2020 than it was in 2019.
Read on to find out about five unusual tax write-offs most people don’t know about.
1. Foster Pets
Yes, that cute puppy you’re fostering might get you a tax break. Fostering dogs can come under the “charitable expenses” tax deduction.
For instance, let’s say you foster a dog and buy a bed, treats, and other supplies. Keep those receipts in case you can itemize them as tax deductions later.
But make sure you’re not getting reimbursed by the foster organization you’re working with first. If they’re reimbursing you (and many organizations will), then you’ve got no claim come tax time.
2. Business Trips
You may already know about travel expenses on the list of tax deductions. Yet many people don’t know that the definition of “business trip” can be more generous than they thought.
In some cases, a cruise can be tax-deductible. But you better be doing something related to your job on that cruise ship. For instance, maybe there’s a corporate retreat that involves sailing through the Caribbean.
You can also deduct some, but not all, of your meal costs. For whatever reason, you can only write-off 50 percent of your meal expenses on business trips.
3. Teaching Materials
Education funding is not always as robust as it should be. If you’re a teacher, you almost certainly have to pay out of pocket for essential supplies.
But K-12 teachers can find income tax relief in an unexpected place. Federal law allows for a deduction of up to $250 for things like books and school supplies. Computer equipment and software can also count.
4. Health Insurance
You can deduct health insurance costs over 10 percent of your adjusted gross income. This works best for people who had a lot of medical bills the previous tax year.
Let’s look at an example of someone eligible for this deduction. Let’s say you have an adjusted gross income of $50,000 and paid $6,000 in insurance costs and other expenses. Maybe you had to have surgery that wasn’t fully covered by your plan, for instance.
10 percent of your income is $5,000. So since you paid $6,000, you can claim that last $1,000 as a deduction.
5. A Military Move
If your military service requires you to change stations permanently, you can deduct those moving expenses. So if your orders require you to go from North Carolina to California, you should have a long list of tax deductions.
The moving deduction used to apply to non-military people who were moving to a new town for work. But that benefit got eliminated in the 2017 tax bill.
More Tax Tips
The above tax tips may not apply to your situation. But the new tax code doesn’t have to be as scary as it seems.
We’ve got financial advice to help you navigate the new landscape. If you found this piece helpful, bookmark our money tips section for more.