Don’t leave any money on the table when doing your taxes this season. Paying attention to tax deductions that you qualify for is an easy way to maximize your refund. According to the IRS, the average refund was about $2,700 in 2015. We want you to get the most out of doing your taxes and get that big refund, too.
Itemizing tax deductions on your return can potentially add more dollars in your bank account come spring or whenever you receive your refund. There are some deductions that you may be unaware of or others that you simply forget about each year. We don’t want that to happen again. Here’s our list of the top 5 tax deductions that are commonly overlooked:
- The Doctor Will See You Now. Going to the doctor can be expensive with copays, cost of transportation, prescriptions and premiums adding up to large amounts. However, most people don’t know—or take the time to find out—that medical expenses can be a major deduction item. So, if you got an annual exam, contact lenses, glasses, visited a chiropractor, purchased birth control pills, used a service animal, or even got braces in 2015, make your deductions and get back some of that money you spent taking care of yourself. Remember, medical expenses are deductible if they are not reimbursed by your health insurance provider and the expenses exceed 7.5 percent of your adjusted gross income if you’re 65 or over or 10 percent of your AGI if you’re under 65 years old. To report medical expenses, please use Schedule A Form 1040.
- Oh Baby! Millennials are waiting longer to start families, with some deciding to forgo children all together. For couples with baby fever, the reward outweighs the cost hands down. The deductions a baby can produce might surprise you. For those of us that need a little extra help, infertility treatments has proven to be very successful—and deductible. Treatments like artificial insemination, tubal ligation reversal and vasectomy reversal surgeries, as well as In Vitro Fertilization are all tax deductible. Infertility costs can reach into the tens of thousands, so take advantage of these deductions at the end of the year for a greater return.
- Working From Home Just Got Easier. Working from home can be great, but keeping track of all your expenses can oftentimes be a hindrance. The IRS did us a solid a couple of years ago by developing the Simplified Business Use of Home, which is a deduction designed for self-employed individuals that work from home (or a remote agent style employee). It allows the self-employed a deduction using up to 300-square feet of their home at an automatic $5 per square foot, which takes the place of all other expenses. The maximum deduction amount is $1,500.
- Breaking Up Is Hard To Do. We’ve all heard the overused truism that 50 percent of marriages end in divorce. Since people are tying the knot at a more mature age, marriages are beginning to stand the test of time. However, if you are not a part of the “lifers” club, and you have to pay alimony, you’re in luck! Alimony is deductible as long as you follow the requirements put in place by the IRS, such as payments must be made in cash, alimony must be court ordered, the former couple cannot live together or file a joint tax return, just to name a few. There are seven requirements in all, for a complete list visit the IRS website.
- Still Getting Help From Mom And Dad? Congratulations on graduating (six months ago)! Finding that “dream” job is taking longer than expected, so your parents have agreed to help you out with student loan payments. This is great in more ways than one. First, your parents are footing the bill, which is one less thing you have to worry about while you are trying to find your place in the workforce. Secondly, you can deduct the interest paid by your parents! This is what we in the tax biz call a “win-win.” As long as the previous student is not still being claimed as a dependent they can qualify to deduct up to $2,500 of interest. We hear you thinking out loud, and no, your parents have no claim to the student-loan interest because they are not responsible for paying back the loan, you are. Like we said, “win-win.”
Now, you can’t say we never told you. See if you qualify for these tax deductions to get the most out of doing your taxes.