Photo courtesy of 1040Return.com
When it comes to filing taxes, it’s important to look for deductions that can be taken beyond the most common ones. Deductions are one of the ways that people can reduce their tax liability. While accountants may know the full scoop on the many deductions that are available, most individuals doing their taxes do not. The more one knows about the myriad of tax deductions, the more money they will keep in their pocket come tax day.
“Deductions can be a confusing area for individuals who are doing their own taxes,” explains John Gregory EA, tax practitioner and founder of 1040Return.com, a site providing tax preparation and resources. “Many people are unsure what they deduct, so in the end they end up taking more money out of their pocket.”
Here are some little known tax deductions to keep in mind:
1. Breast augmentation. Breast cancer is considered a disfiguring disease because the treatment results in the loss of a woman’s breast. Accordingly, the breast reconstruction surgery ameliorates a deformity directly related to a disease, making the cost medical care expense, which is deductible.
2. Fertility enhancement. The cost of overcoming infertility can be considered a medical expense. Procedures such as in vitro fertilization (including temporary storage of eggs or sperm), and surgeries that include reversing prior surgery that prevented the person from having children, are both deductible.
3. Israeli charities. Under the U.S. Israel income tax treaty, a contribution to an Israeli charitable organization is deductible if and to the extent the contribution would have been treated as a charitable contribution if the organization had been created or organized under U.S. law. To deduct the contribution to an Israeli charity, you must have income from sources in Israel. The deduction is also limited to 25 percent of your adjusted gross income from Israeli sources.
4. Hot therapy. If you have prescription from your doctor saying it is medically necessary, you can deduct the cost of a hot tub.
5. Stop smoking programs. You can include in medical expenses amounts you pay for a program to stop smoking. However, you cannot include in medical expenses amounts you pay for drugs that do not require a prescription, such as nicotine gum or patches, that are designed to help stop smoking.
“There are many tax deductions that are overlooked each year,” adds Gregory. “The more you know now about some of these deductions, the more you can save later. It’s important to take advantage of all the deductions you can so you lower your tax liability as much as possible.”
1040Return.com provides tax software resources, information, tools, and more. It has been designed to help the self-employed and small business owner. They have also conducted research to calculate the average net profit for all 318 industries, based off of average gross sales. This free information helps small business owners maintain accurate records and provides an idea of IRS expectations. They also provide audit protection insurance that helps if there is ever an audit. For more information on 1040Return.com visit the site at: www.1040Return.com.