When an individual files their tax returns each year they are able to claim a number of tax deductions.
Many times a tax deduction can reduce the amount of money that is owed to the Internal Revenue Service (IRS) or it can create a larger tax refund. The most commonly used tax deduction is the standard tax deduction; however, there are number of other tax deductions that many individuals fail to claim or even consider. Frequently overlooked tax deductions can prevent a taxpayer from getting additional money that they deserve. Claiming a number of tax deductions often requires receipts or other documentation. For this reason there are many individuals who may be unable to claim some of these frequently overlooked tax deductions on this years tax return. To prevent yourself from losing even more money next year taxpayers are encouraged to spend the whole year preparing for tax season and tax deductions.
One of the most frequently overlooked tax deductions is that of medical expenses. To claim a medical expense deduction the medical expenses must be at least seven and half percent of a taxpayers income. While this may seem like a large amount of money there are some individuals who will definitely qualify for this tax deduction. Families with a large number of children often qualify for this deduction because the total cost of healthcare for multiple children is often high. Taxpayers who recently had a child or were diagnosed with a life threatening illness are likely to meet the deduction requirements due to do multiple checkups and hospital visits.
There are a number of taxpayers who carefully keep track of the amount of money or items that they donate to charities; however, the majority of taxpayers do not which makes charitable donations another frequently overlooked tax deduction. Individuals who donated money, clothing, or household items are able to claim a tax deduction as long as the charity is approved by the Internal Revenue Service (IRS). The majority of most well known charities are approved; however, individuals can obtain a full list by visiting the website of the Internal Revue Service (IRS) which can be found at irs.
Unfortunately there are a number of taxpayers who will qualify for a natural disaster tax deduction. With the recently active 2005 hurricane season and the dreadful predictions of more to come it is likely that a large number of individuals will qualify for a natural disaster tax deduction. This deduction is used to make up for the amount of property damage that was not covered by homeowners insurance. To qualify for a natural disaster tax deduction the property loss must be at least ten percent of an taxpayers income. It is sad to say, but with the majority of tornadoes, hurricanes, and floods is it not uncommon for a home to be completely destroyed which would allow the tax deduction to be claimed.
With many businesses declaring bankruptcy or laying off their workers there is an increased number of individuals looking for a job. Another one of the most frequently overlooked tax deductions is that of expenses related to a job search. Many job seeker know how expensive looking for a new job can be. It is possible for job seekers to claim tax deductions on their phone expenses that are related to a job search. These phone expenses may include long distance telephone calls to set up an interview or even over the phone interviews. In addition to phone expenses job seekers can also claim the mileage of going to and from a job interview. Other job search deductions may include the cost of having a resume professionally prepared and the costs of mailing or faxing out that resume.
Additional frequently overlooked tax deductions include the amount of money spent on sales tax, tax preparation, gambling losses, property taxes, and more. The best way to become aware about the most frequently overlooked tax deductions is by using a tax software program to prepare your taxes or hiring the services of a professional tax preparer. These are great ways to become aware of commonly overlooked tax deductions and to determine if you qualify for them.