Are consumers missing out on valuable deductions?

consumermissingoutEvery year, millions of Americans fret over the ways in which they're going to have to deal with their tax obligations as they get everything in order and fill out all the necessary documents. But in the rush to get everything done, many may also overlook potentially valuable deductions for which they are eligible but do not actually claim, and that can cost them as much as thousands of dollars per year.

When trying to determine exactly which deductions for which they may be eligible, consumers might first want to think about the ways in which their lives have changed in major ways over the previous calendar year, according to a report from CNBC. For example, if they've had a child, helped to put themselves or someone else through college, or gone through a divorce, there might be some significant tax benefits for which they may qualify.

Consumers can also write off any donations they've made to qualifying charities or other organizations over the course of the year, the report said. However, the way in which they value non-cash donations can fall under IRS scrutiny, and they will also typically have to provide receipts or some other type of proof of their donations.

What else is there to know?
In addition, those who have gone through a natural disaster that caused them to suffer some sort of a loss financially might be able to write that amount off if their home is in a federal disaster area, the report said. However, if there was a payout from an insurer or the like, that would often either reduce or eliminate the value of the deduction, and this is a mistake that many who make such a claim step into.

"It's sheer speculation on my part, but I think a lot of taxpayers may accidentally deduct things that they don't realize are going to be paid by insurers," Melissa Labant, director of tax advocacy for the American Institute of Certified Public Accountants, told the network. "They truly are trying to do the right thing, but they may not know that insurance is going to cover it."

Of course, consumers who are unsure of their status as it relates to deductions should consult with a tax professional, as this may help them to be sure of exactly how much they owe and what they're able to claim on their filing for the year.

For a more in-depth look at Liberty Tax Service, visit the Give Me Liberty! Magazine. Follow Liberty Tax on Facebook and on Twitter or contact Liberty Tax directly at 1-877-at-Liberty.

Disclaimer: Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.

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