As we are nearing the years’end, many of us begin to start thinking about filing our tax returns. The earlier the better I always say! As you prepare, you should research any tax breaks or rules that are new to 2015. Ask your accountant as well. Many people don’t think about tax breaks for renters. Many just assume that if they don’t own a home there isn’t much to write off. Home owners can write off things like mortgage interest, energy saving home improvements and other items that renters just don’t have an opportunity to cash in on. But just because you rent doesn’t mean you can’t enjoy other incentives. Whether you own or rent, you can take advantage of these often-overlooked tax breaks.
I just did my seasonal closet cleaning now that the cooler months are approaching. Inevitably there are always clothes, shoes, sporting goods, purses, etc… that have not been worn or used in awhile and are ready for the Goodwill box. If you donate these items to Goodwill, or another charitable organization, you can deduct that amount on your taxes. Just remember to get a receipt each time you donate, and then keep the receipts in a file throughout the year. It’s easy. If you forget the receipt, you can still claim a donation on your taxes by carefully figuring the value of the items donated.
Ready to purchase a home? Well, know that you can deduct the points you pay for financing. Points are fees charged by mortgage companies to give buyers lower interest rates. If you are purchasing a home, points might also be called loan origination fees. Point fees can be found on your settlement statement.
If you are moving due to a job change and even if it is into another rental, you can deduct what you spend packing and moving your belongings as well some costs for storage, insurance, transportation and lodging associated with the move. There’s no limit to the deduction, but your new job must be at least 50 miles farther from your home than your old job.
If you are like me and pay your own health insurance, you can deduct your premiums without itemizing. If you have employer-paid health insurance, you also might be able to deduct a portion of the premiums you paid. If your medical expenses, including health insurance premiums, exceed 7.5 percent of your adjusted gross income, they are deductible.
If you are an educator, you know how easy it is to spend your own money on items to enhance learning in your classroom. You can deduct up to $250 for items including books, supplies and computer equipment. No itemizing required, just go for it!
Another thing often overlooked are breaks for higher education. You can deduct up to $4,000 without itemizing. The only qualification is your adjusted gross income must fall below $65,000 for singles, and $130,000 for joint returns. Higher education interest paid on loans is also deductible if your balance is higher than $18,000.
