5 Commonly Missed Tax Deductions
Over the weekend I finally took the plunge and did my taxes. Even though I completed my tax return, I haven’t submitted it to the IRS just yet. I always like to let it sit for a few days, then go over it again to make sure I haven’t made any mistakes or missed any tax deductions that could improve the outcome of my tax return. There are a few common tax deductions that everyone should make sure they’re taking advantage of if possible.
Second Mortgage Interest
Most people already know that interest from your primary mortgage is tax deductible. If you took out a 2nd mortgage for debt consolidation, home improvement projects, or some other reason, the interest from that loan is also tax deductible.
Real Estate Taxes
Many homeowners have their real estate taxes paid directly out of an escrow account by their mortgage lender so it’s easy to forget that real estate taxes are tax deductible. This can be a sizable deduction, so don’t forget it!
Personal Property Taxes
Each year we pay to register our vehicle with the Department of Motor Vehicles. That registration fee is tax deductible. Just how much can be deducted varies from state to state. When filing your taxes, check to see what your state allows for a deduction for your vehicle registration fee.
Car Sales Tax
We helped our son purchase his first car just a few weeks ago. While he did pitch in, my wife and I shouldered the majority of the cost of the vehicle which included a significant sum for sales tax, which is tax deductible. I’ve already started a folder for next year’s taxes and place in it a copy of the sales receipt for the car as a reminder.
Student Loan Interest
With my son starting college in the fall, student loans are on my mind a lot. If he ends up taking out student loans, they will have to be paid back once he finishes school. The interest paid on student loan debt can be used as a tax deduction.
Every tax deduction can help improve the end result of your tax return. It’s always a good idea to go through your return a second time and make sure you’re taking advantage of every deduction that you possibly can.
How about you, Clever Friends, do you have any to add to the list?
While thinking about it, you may want to check these out:
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A review of the National Consumer Panel
Things to remember when filing for a loan application
Brought to you courtesy of Brock