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.