State Sales Tax
Did you know that state sales tax is deductible from your tax return? If you live in a state that doesn’t have income tax, like Nevada, this is a great deal as it can reduce your tax bill.
Sales tax for major purchases like automobiles are deductible as well as general sales tax but you have to have documentation like receipts to back up the claim. Most of the best online tax filing services will automatically help you calculate the credit or you can use the calculator provided by the IRS. Those people who have a box of receipts under their desk? That is exactly what they are thinking.
Please note that if you live in a state that does collect state income tax, the income tax deduction will likely be greater than the sales tax deduction.
Last Year’s State Taxes
If you’re self-employed or a business owner, chances are you had to pay state taxes last year. Did you know that this amount is deductible on this year’s federal tax return? If you didn’t know before, now you do. You can deduct any state income tax paid from last year on this year’s form and you don’t need to itemize to do so.
Travel Expenses for Military Reservists
Are you in the National Guard or a reservist? You may be able to deduct travel expenses for weekend drills or meetings. To qualify, you have to drive more than 100 miles to the drill or meeting location and you must stay overnight.
If you qualify, you can deduct the entire cost of lodging and half of your meals. You can also deduct $0.54 a mile as well as any parking fees or tolls. Also, you don’t have to itemize to get this deduction.
Moving Your Pet When You Take a New Job
Some of you may be aware that the cost of relocating for a new job is deductible. But did you know that your deduction also applies to your pet? Surprise!
Any costs you incur to move your pet, such as pet lodging, acquiring transport carriers and more are deductible as part of your moving expenses.
Get a Deduction for Losing Weight
You may not be aware of this, but losing weight may be tax deductible. If your doctor has told you that your health is being impacted by your weight, steps you take in order to lose weight can be deductible. Provided that your doctor signs off on the steps or programs that you’re undertaking to lose weight, these activities can be deducted as a medical expense.
Cost of Preparing Taxes
How much did it cost you to prepare your tax return last year? If you are itemizing deductions, self-employed or a farmer, you can deduct the cost of tax preparation services on your return. When claiming this deduction, you’re allowed to deduct expenses related to filing a return, any legal advice received regarding the return and even the cost of tax-related books. If you decide to e-file using the best tax software like TaxAct, you can also deduct the cost of the program.
Note that you have to claim the deduction the same year as the fees are paid. If you’re using a tax preparer rather than e-filing, make sure you know how much they charge up-front so you can deduct that amount. (Or just save money by e-filing yourself!)