5 Unreimbursed Expenses You Can Deduct

Choosing to itemize your deductions can provide an opportunity for taxpayers to maximize their tax refund. However, figuring out which expenses are deductible can sometimes be tricky. Some of the most often missed deductions may be taking full advantage of unreimbursed expenses, which are deductible. The following is a list of some of the most common:

1. Health Expenses

If your medical expenses for the year amount to 10% or more of your adjusted gross income, you can deduct the portion over 10% on your tax return. 10% may seem like a steep threshold, but this includes a wide variety of medical expenses, such as:

  • Medical expenses for everyone in your family. This includes dental and optometrist appointments, as well as regular doctor appointments.
  • Your health insurance premiums.
  • Travel expenses for getting to and from medical appointments. The IRS assigns a value to each mile you travel for the sake of health purposes. In 2016, it was 19 cents per mile.
  • Uninsured medical treatments. Your insurance may not cover your spare pair of eyeglasses or a new set of dentures, but these things are tax-deductible expenses.
  • Medically necessary items that your physician recommends. For example, if you have a respiratory condition and your doctor says you should install an air conditioner in your home, you may be able to deduct the cost of the AC unit.
  • Medical conference costs. If you attended an informational conference that relates to a chronic disease that someone in your immediate family is suffering from, some of those conference expenses are tax deductible.
  • Some home renovations. For example, if someone in your family is in a wheelchair and you have to install a ramp, the ramp counts as a medical expense.
  • Stop-smoking and weight loss programs that are medically necessary.

2. Charitable Contributions

Any donations you make to a charity or a church are tax deductible, but it isn't just these straight monetary contributions that can help you out around tax time. Any expenses that go into charitable gifts are also deductible. For example, if you bake six dozen cupcakes for a church bake sale, the money you spent on ingredients is deductible. The miles you drive while you're volunteering for a charity may also be deductible.

What if you have to leave the kids at home while you're out volunteering? The cost of a babysitter may be eligible to be included.

3. Job Hunting Expenses

If you decided to hit the refresh button on your career during the preceding tax year, some of the expenses associated with the job hunt may be tax deductible.

To be eligible the expenses must equate to at least 2 percent of your gross income. You also must be looking for a job in the same field as your previous job.

These expenses might include things like the cost of traveling to and from job interviews and the money it takes to print professional-looking resumes. More can be found here.

4. Sales Tax or State Income Tax

You can choose to deduct either sales tax or state income tax from your federal taxes. In states without a state income tax, it is worth holding onto your receipts for big-ticket items. If you bought a new car, new kitchen appliances, an expensive piece of jewelry, or something else in which you were charged considerable income tax, the amount paid may be claimed when filing with the IRS.

Even if you live in a state that has income taxes, you still might want to deduct your sales tax instead of the state income tax. You can always prepare your return both ways to see which method saves you the most money. Alternatively, you can use our online tax preparation program, which will automatically help identify the deductions that will lead to your biggest refund.

5. Moving Expenses

If you relocated to start a new job or if you moved in order to embark on a new position with your current employer, your moving expenses might be able to go on your tax return. You just have to meet a few requirements:

  • The distance between your old home and your new job must be 50 miles farther than your last job was from your old home. For example, if you previously had to travel 5 miles to get to work, your new job must be at least 55 miles from your old home.
  • You have to start your new job shortly after you move.
  • During the 12 months after you move, you must work full-time for at least 39 weeks. The 39 weeks don't have to be consecutive, and they don't even need to be for the same employer.

Some moving expenses which you may include as part of this deduction are, the cost of transporting yourself and your possessions, as well as the cost of renting a storage unit for up to 30 days. The best part of this deduction is moving expenses are "above the line," which means you can deduct them even if you choose to take the standard deduction on your tax return.

With each of these expenses you want to make sure to hold onto all of your receipts. If you choose to file with E-file.com we will assist you with identifying which expenses are deductible so that you can submit your tax return with confidence.

Quiz: Are My Moving Expenses Tax-Deductible?

Test your knowledge about moving expenses on this quiz to see how much you can write off on your next move.

True or False: You can only deduct moving expenses if you’re moving for a new job, not relocating for the job you currently have. Answer
False. Providing that you meet the timing and distance tests, moving expenses related to relocating for your current job are deductible just as they would be for a new job or your very first job.

Following your move, how many weeks out of the year do you need to be working full-time at the job you relocated for in order to take the moving expense deduction? Answer

A. 26 weeks
B. 39 weeks
C. 48 weeks
D. 52 weeks

B. In most cases, you must work full-time for at least 39 weeks of the following year following your move-in date. There are exceptions to this rule such as disability, your spouse needing medical care, and other hardships.

Which of the following moves is NOT tax-deductible? Answer

A. Alice is starting her first job out of college. Her only expense is her plane ticket from Chicago to Los Angeles.
B. Ben lives 20 miles away from his job in New York City. He is offered a job in New Jersey 75 miles from his current residence, and he spends $5,000 on hiring a moving service.
C. Charlie lives 40 miles away from his job in Washington D.C. His job relocates to Southern Virginia 70 miles from his current residence.
D. Danielle is a restaurant owner who lives in Florida, five miles away from her business. She reopens the restaurant in Texas about 1,000 miles away.

C. There is no limit on moving expenses. For your first job ever, your move just has to be 50 miles from your current residence. Alice clearly meets the distance test. Ben meets the distance test since his new job is over 50 miles plus the distance from his old residence to current job (it would need to be at least 70 miles away, and it’s 75 miles.) Danielle can also deduct her moving expenses. While self-employed people have a longer time test, her expenses are otherwise deductible. Charlie, however, cannot deduct his moving expenses because he does not meet the distance test. Relocating for the same job is deductible, but he already commutes 40 miles to work so after adding 50 miles, his new workplace would need to be at least 90 miles away to deduct his moving expenses.

You incurred the following moving expenses: $200 to rent a truck, $500 to transport your pets, $2,000 security deposit on your new home, $100 to disconnect the utilities in your old home and $400 for new furniture. How much is deductible? Answer

A. $800
B. $1,200
C. $2,700
D. $3,200

A. Hiring movers or renting a truck are deductible, along with added on moving supplies. Transporting and temporarily storing any of your property, including pets, is also deductible. Setting up utilities in your new home is deductible as is disconnecting utilities in your old home. Security deposits aren’t deductible. You can deduct moving your furniture from your old home to your new one but not the purchasing new furniture.

True or False: If your employer reimburses you for moving expenses, you cannot deduct your moving expenses. Answer
True. Any moving expenses that your employer reimburses you for can’t be deducted. However, you can deduct the portion that was not reimbursed. That said, if the reimbursement is more than what you paid, the excess is taxable income.

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