Do you have any potential tax breaks hiding in your finances?
You may be surprised by what can qualify as a tax deduction in the right circumstances. Expenses that may be irregular or luxurious to one person can make for perfectly reasonable deductions to another.
1. Swimming Pool
If you have a medical condition that would improve with aquatic exercise—like rheumatoid arthritis—your swimming pool expenses might qualify as a deduction.
2. Airline Baggage Fees
If you travel for business and are self-employed, you may be able to deduct your baggage fees as a cost of doing business. At $25 or more per bag each way, those costs can certainly add up quickly.
3. Jury Duty Pay
If you served on a jury and were paid for your service, then turned that payment over to your employer because you were salaried while serving, you may be able to deduct your jury duty pay on your taxes.
4. Smoking Cessation
In 1999, the IRS added another benefit to the programs that help people stop smoking: the cost of these programs may count as a medical expense for taxpayers who itemize deductions. Taxpayers may also deduct expenses for prescription drugs designed to alleviate nicotine withdrawal. However, there are indications tax law does not allow deductions for over-the-counter medications, such as non-prescription nicotine patches and gum. The law limits the itemized deduction for unreimbursed medical expenses to the amount by which these expenses exceed 7½ percent of adjusted gross income.
Taxpayers who paid for smoking-cessation programs in recent years might still be able to get a refund by filing an amended tax return. Those who already had enough medical expenses to deduct them may amend their returns to include the smoking program costs. Other taxpayers should check their returns to see if these added expenses would give them enough medical expenses to itemize.
5. Volunteer Work Donations
If you use your car to get to and from a program where you volunteer, you may be able to deduct the cost of gas, or you can use the standard mileage rate of 14 cents per mile. Be advised, the standard rate for business is 53.5 cents per mile, so be careful not to confuse the two.
6. Pet Relocation
Getting Fido or Fluffy to a new home may not seem like a standard deduction, but if you’re moving for the purposes of employment, the cost of relocating your pet can possibly be included as a write off.
Talk to a Certified Public Accountant or another accredited tax advisor to see if you may be able to take advantage of these—shall we say, interesting—tax deductions.