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Tax Deductions: Is the Government Still Holding Your Money?

With tax season upon us, I wanted to review the top six things that people overlook when filing their taxes. Joining me today is Butch Shoup of CliftonLarsenAllen to offer some tax advice! 

  1. Missed property tax deductions. When a seller is closing on their home, as Butch tells us, they often miss property tax deductions that qualify for that year’s tax return. You may receive your interest and tax notice from your mortgage banker, but you forget your closing taxes.   
  2. Charity-related goods/services. Once you have itemized your deductions, you may overlook the
    non-cash deductions that you have available. People commonly think of dropping
    unused goods off at the Goodwill but don’t realize that the mileage they
    accumulate through driving to various events on behalf of the charity is
    deductible at 15 cents/mile. Whether it is buying supplies or food for the
    charity, these can be deducted from your taxes!
  3. Job hunting. Anytime that you are spending money placing a resume online, meeting with people, networking or looking for that next job, those costs are deductible! The caveat is good documentation; track what you’re doing, who you’re doing it with. Good records lead to good deductions!
  4. Childcare expenses. If both parents work, there is a credit offered by the U.S. government (which is better than a deduction). Be careful that you aren’t actually pre-paying for this through your W-2; this would cause the net amount to be used as a credit.
  5. Refinancing. As interest rates have dropped, many people have refinanced their homes. If you pay a point when refinancing, that point has to be amortized over the life of the loan; this makes the actual deduction quite small. However people tend to miss deducting the initial point payment from the last refinance. Keep in mind that there is a three year statute of limitations for amending your tax returns!
  6. Energy efficiency credits. Energy efficient credits have been available up through 2013, but have henceforth been dropped for the year 2014. This is always a hot-button issue for whether the government would renew this or not.
      If you need any more advice, we would love to put you in touch with Butch so contact us if you have any questions. Thanks and have a great day!