Three of the Most Common Deductions that People Often Miss

The sad fact is, people are not able to benefit from all legal tax deductions simply because they don't know that these exist. They only find out about these deductions only when they have already filed their returns and it's already too late. This scenario is normal taking into account the number of deductions that are available and the different tax laws to take note of. The fact that people attempt to make use of absurd tax deductions makes matters both worse and depressing. Still, there are several deductions that are left untapped and this write-up discusses three of them.

If you donate anything to a non-profit organization that is not cash, then be certain that you don't forget to take the deduction and claim it on your tax return. This includes donations charged to your credit card. You're allowed to claim the deduction in the same year that the charge was made to your account and not at the time when the bill is finally settled.

Make sure that the charity gives you a receipt that will reflect the donations that you have given them. For charged transactions, you may also ask your credit card provider to give you the needed record. Bear in mind as well that donations of actual items follow the same policy. Thus, if you decide to simply donate old furniture and used clothes, go ahead as these too, are tax deductible, to a certain degree. Just remember to get evidence that the donation was indeed made, or else, you'll have no definite way of keeping that deduction. Lastly, be certain that all items donated to a non-profit organization are in good condition, otherwise, your application for the applicable deduction will be denied.

You'll also be able to get a deduction on a certain portion of the amount that results from refinancing your home. For instance, if you get a 20-year term home refinance on July 1, you'll have 7 out of the 240 months after December 31 of the same year. Now, if your new points caused you to have to pay $2,400, then you can actually deduct $70 for that year, in other words, $10 per month for each of those seven months. Until the entire $2,400 or all of the new points have been completely covered, you are actually allowed to subtract around $20 yearly.

A certain deduction that people usually miss taking because of special requirements is their health insurance premiums. Actually, you can claim deductions for these, and even for premiums pertaining to long-term care. You may make use of this tax benefit to substantially reduce your taxes as long as you pass certain criteria. You just need to add these amounts to your medical expenses and you're good to go. In addition, before any deduction can be claimed, your total medical expenses should be more than $7.5% of your adjusted gross income, or AGI.

 Darrin T. Mish is a Nationally recognized Attorney whose practice focuses on representing clients across the United States with IRS Problems. He is AV rated by Martindale-Hubbel and is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. He has been honored by a listing in Martindale-Hubbel's Bar Register of Preeminent Lawyers. His passion is providing IRS help to taxpayers with both individual and payroll tax problems. He teaches attorneys, CPAs and Enrolled Agents in the finer aspects of IRS representation all around the United States. He can be reached at his website at http://www.getIRShelp.com

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