You could be leaving tons of dollars on the table when you prepare your tax return this year. From home sales to exercise, these lesser known tax return deductions can make April 15th all the more happier for you and your family. Since what you don’t know can hurt you, especially when it comes to tax returns, it is up to you and your tax pro to discover all the deductions you can legally take and claim them. Here are 6 tax return deductions you may not know about to help you do that.
1. Home Sales in the Six-Figures
If you’ve sold your home and made a nice profit, you can exclude up to $250,000 of the gain from your income if you’re single. This number goes up to $500,000 if you are married and filing jointly. The house or property must have been your main dwelling during at least two of the last five years. You may determine the gain on your home by calculating the difference between the proceeds of the sale and the base price. This figure includes what you originally bought the home for, plus any improvements that have been made, such as an improved kitchen, pool, fence, etc.
You can even add to the base price the real estate agent’s sales commission, closing costs, and other settlement fees such as legal, recording, and survey. Be sure to keep detailed records to back up your claims just in case the IRS ever decides to follow up. You can check out IRS Publication 523 for more information on this deduction.
2. Disaster RecoveryExpenses
Those clients of mine who live in Jersey Village and Houston may have had their homes or property affected by the big “tax day flood of 2016” or other natural disaster. If your property was damaged by a natural disaster for which federal aid was issued, you may be eligible to deduct uninsured costs that were paid to repair the damage, live outside the home, and other related expenses. This commonly includes the cost for a new roof, hotel expenses, rental cars, etc.
3. Summer Camp for the Kids
It isn’t just a handy way to get a few weeks off during the hottest season of the year. Summer camp can also be one of the great tax return deductions of your year. Daycare is an acceptable tax deduction because it can qualify as childcare. If you are the parent or guardian of a child under the age of 13, you may not realize that summer camp costs also qualify, especially if it’s done so you can work.
4. Animal or Pet Expenses
These types of tax return deductions are usually done for medically necessary animals like seeing-eye dogs or dogs for the blind. However, if your pet or animal is being used for another medically related purpose, you may claim the costs associated with caring for them. This includes costs such as food and vet bills, as a tax deduction. The deduction is also for an animal that has been deemed a medically necessary tool for the mental comfort of a patient.
5. Financial Planning Expenses
If you use a financial planner, wealth manager, bookkeeper, or similar to manage you and your family’s wealth, you can deduct the cost. The cost of planning may be deducted if you itemize your return and the cost exceeds 2% of your adjusted gross income. These expenses may include their fees, subscriptions to financial publications like “Fortune” or “Forbes,” and more.
6. Exercise
Has your doctor ordered you to exercise by running, walking, swimming, etc? You may be able to deduct the costs associated with them. This includes for running shoes, workout clothes, gym fees, a bicycle, and anything that can be directly tied to it.
Tax Return Deductions in Houston
If you are wondering if you need help preparing your tax return to get the most deductions in Houston or have questions, feel free contact us for help.