55 Safe & Legal Deductions to Save on Taxes
A tax deduction is where you subtract all or part of an expense from your total, taxable income, thereby reducing the amount of tax you pay. State and federal laws define the rules that determine which expenses can be deducted. But here are some deductions that you might be able to use to save money.
This list was accurate at time of publication. Contact your tax preparer for current information and any changes in tax laws.
- Cost of having a tax return prepared the previous year.
- Dues to professional societies and subscriptions to professional journals.
- Medical insurance premiums.
- Union dues and expenses.
- Liquidated damages to a former employer, such as for a broken contract.
- Gambling losses. (However, winnings are taxable).
- Money given to non-profit charities.
- Cost of uniforms and/or special clothing required on the job.
- Special shoes required for your job.
- Special tools, equipment and supplies necessary for your job.
- Credit for political contributions.
- Credit for care of a child or dependent.
- Earned income credit (for low income workers).
- Energy tax credit, for making energy efficiency improvements to home.
- Charitable gifts such as clothing, furniture, real estate, etc.
- Doctor's, dentists, hospital bills.
- costs of prescriptions, drugs.
- Expenses for eyeglasses, hearing aids, dentures, contact lenses, etc.
- Employment agency fee when looking for work.
- Moving expenses, when necessary for business related reasons.
- Fees for books, newsletters, seminars, etc., that give tax advice.
- Upkeep expenses (including laundry, cleaning) for uniforms, work clothes.
- Protective clothing such as safety shoes & glasses, hard hats, etc.
- Appraisal fee to determine amount of loss for casualty or theft deduction.
- Appraisal fee to determine market value of property claimed as deduction.
- Home telephone expenses relating to your job, including long distance.
- Customer entertainment.
- Professional licenses.
- Malpractice insurance (as in case of nurses, doctors, etc.)
- Investment expenses for advice paid to banks, brokers, advisors, etc.
- Travel expenses to consult with broker, to do investment research, etc.
- Cost of safety deposit box rental.
- cost of preparing, typing, printing, mailing, etc., job resumes.
- Cost of seminars, books, classes, etc., on how to write a job resume.
- Travel and transportation expenses necessary for finding new employment.
- Meal and lodging costs when necessary for finding a new job.
- Cost of education required by your employer for keeping your job.
- Cost of education to improve skills required in performing current work.
- Donations to churches, religious, non-profit organizations.
- Losses caused by accidents, storms, floods, thefts, etc.
- Elective surgery such as face-lifts, breast implants, thigh-tapering, etc.
- Acupuncture.
- Laetrile, in states where it is legal.
- Psychiatric and psychological care and treatment.
- Transportation to and from places for medical examinations, treatments, etc.
- Sales taxes, including big-ticket times such as car, boat, etc.
- Mortgage interest.
- Interest on credit card and department store charges.
- Interest on loan purchases, such as automobile.
- Closing costs when selling home & moving, for business related reasons.
- Capital gains and losses.
- Personal retirement plans such as IRA and Keogh plans.
- Personal property taxes, state and local taxes.
- Real estate taxes.
- Alimony.
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