Are there situational tax deductions some Americans don't know about?

Form 1040Millions of Americans know that there can be significant tax benefits available to them if they know what they qualify for, but the knowledge gap is often a difficult one to overcome, and many taxpayers could leave large amounts of money on the table. One of the things that might benefit people most is looking into any deductions that are available for people of their station in life, because there might be more than a few.

For instance, people who are involved in many aspects of K-12 education - such as teachers, principals, student aides, and counselors - may be able to claim as much as $250 per year in unreimbursed out-of-pocket expenses for things they might use in the classroom, according to a report from Main Street. That could include books, school supplies, equipment, and more. However, if the amount they spent on these issues exceeds 2 percent or more of their adjusted gross income, the deduction could be even larger. And for married couples filing jointly for which both spouses work in education, those deductions can be claimed by both, not just one.

Other situations that can lead to deductions
In addition, parents and students alike who are paying for college may be able to claim a number of benefits that can serve to reduce their liabilities significantly, the report said. However, one pitfall into which many of these people slip is to claim more than one of the valuable education credits that might be available to them; in reality, they can only claim one, so doing some math to find out which will be most valuable is important at this time.

Further, those who are done with college but still carrying student loans can write off the amount they paid in interest on those balances, the report said. As much as $2,500 can be deducted for themselves, a spouse, or a dependent if their modified adjusted gross income ranges from $60,000 to $75,000 individually, or $125,000 to $155,000 for married couples filing jointly. Those married but filing separately cannot claim this deduction.

Consumers who want to find that they want to know more about the deductions available to them should consult with tax professionals to make sure they're claiming everything they can, and doing it the right way.

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.

Posted To: Tax Ranger's Blog By: Tax Ranger On: Tuesday, February 25, 2014
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