2013 Taxes: Don’t Overlook These Great deductions
Author by Raj Vora
Since most individual taxpayers are in the process of compiling their tax returns in the coming days, below are some tax deductions/credits, though often overlooked, taxpayers are eligible for and should be considered. The following list may help taxpayers save on their taxes and increase their cash flow.
- Mortgage refinancing points: a taxpayer may be able to deduct the points paid on the year of purchase if the taxpayer used the proceeds of a mortgage financing to improve their principal residence.
- Moving expenses: You can deduct moving expenses not only when you relocate, but also when you relocate for the first time. E.g. first time employment after college or moving from other country to the United States for the first time to take employment.
- Miscellaneous deductions: Costs associated with looking for a new job, job education, tax preparation fees, investment expenses are some of the examples that are deductible if the taxpayer itemizes subject to cost exceeding 2% of taxpayer’s Adjusted Gross Income.
- Medical expenses/ HSA: Contribution to an HSA (Health Savings Account) account is tax deductible as adjustment of income up to $6250 for family coverage and up to $3100 for individuals. If you do not contribute to an HSA account and have medical expenses, you can only claim those expenses above 7.5% of your adjusted gross income. Due to these floor limitations, many taxpayers can’t take full medical expenses as a deduction.
- Making home energy efficient: Tax credit is still available to the extent of $500 for expenses incurred in making your home energy efficient.
- Retirement saving contribution credit: Moderate and low-income tax payers are eligible to get some credit for contribution to an eligible retirement account in addition to tax deduction in certain situations.
- Educational cost: There are a few credits like the Lifetime Learning Credit and American Opportunity credit, which is extended in addition to deduction for tuition and fees available for expenses incurred towards education.
Small business owners as well as self-employed individuals may also qualify for large deductions such as a self-directed retirement account (Solo 401K), SEP IRA where you can contribute and deduct a large amount from taxable income and at the same time have control and flexibility to invest in vast variety of investment areas.
All data and information provided in this site is for informational purposes only. KRUPP CONSULTING INC makes no representations as to accuracy, completeness, currentness, suitability, or validity and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its use. All information is provided on an as-is basis.
About the Author
Raj Vora, CPA is the owner of KRUPP CONSULTING INC. If you have any questions pertaining to individual or business taxes or want to learn more about tax saving strategies, visit www.kruppcpa.com or email firstname.lastname@example.org.