Tax tip Tuesday! CPA gives advice about little-known deductionsPosted: Updated:
PHOENIX -- Tax day is just over two months away! And while it may seem a long way off, it's never too early to start getting ready.
On Tuesday's Good Morning Arizona, CPA Bob Hockensmith gave us some tax advice, along with some tips about little-known tax deductions!
When we include our tax deductions, we can always remember the big four: Mortgage interest, state income taxes withheld or paid, real estate taxes, and charitable contributions.
Some of the forgotten deductions are medical expenses. Starting in 2013, the floor is higher (10 percent) for some taxpayers. Most people believe they won't exceed the required percentage floor, so they don't remember to include them. But, on many state tax returns, they are 100 percent deductible if you itemize.
Some other forgotten deductions are as follows:
-Un-reimbursed business or work expenses (uniforms, certain work clothes, small tools, union dues and supplies needed to do your job, laundry away from home, phone calls, faxes, and work related travel and transportation).
If you have un-reimbursed work or business expenses, you might have to file Form 2106. The total amount listed on this form for your un-reimbursed work and business expenses will be transferred to Schedule A, under Miscellaneous Deductions.
-Tax preparation, consultation, investment or planning fees
-Auto tags for your vehicle, boat, trailer, truck, recreational vehicles, motorcycles, horse trailers (anything you pay an annual tax on owning).
-Legal or other fees to manage or defend your income. (Professional athletes get to deduct fines they pay to their leagues for misconduct.)
-Gambling losses up to your winnings. (Keep all your receipts, statements, or log book on what you spent on gambling to prove your losses.)
-Casualty, Theft, Ponzi scheme and Damage losses. (Even though it goes on Schedule A, you are not limited with this deduction.)
-Job Hunting Expenses. (Many people change jobs. If you look for a new job in the same line of work, you may be able to deduct some of your job hunting costs).
Here are some key tax facts you should know about if you search for a new job:
-Same Occupation. Your expenses must be for a job search in your current line of work. You can't deduct expenses for a job search in a new occupation.
-Resume Costs. You can deduct the cost of preparing and mailing your resume.
-Travel Expenses. If you travel to look for a new job, you may be able to deduct the cost of the trip. To deduct the cost of the travel to and from the area, the trip must be mainly to look for a new job. You may still be able to deduct some costs if looking for a job is not the main purpose of the trip.
-Placement Agency. You can deduct some job placement agency fees you pay to look for a job.
-First Job. You can't deduct job search expenses if you're looking for a job for the first time.
-Work-Search Break. You can't deduct job search expenses if there was a long break between the end of your last job and the time you began looking for a new one.
-Reimbursed Costs. Reimbursed expenses are not deductible.
-Schedule A. You usually deduct your job search expenses on Schedule A, Itemized Deductions. You'll claim them as a miscellaneous deduction.