Applying All the Right Deductions to Increase That Return
For many of us, the holiday season tends to strip us down to our bare financial bones. We overspent on gifts, food, traveling, and that excellent New Year’s party, and now we are wondering how we are ever going to get on the right financial foot in the New Year.
While looking for cheap apartments and clipping coupons are definitely a few easy ways to increase the amount of money left over every month, many people rely on their tax return to once again give them a savings account or an emergency fund for the New Year. While this may not be the best practice, it is a fact of life for many struggling with low incomes or one income. So to help you get the most out of your tax return, make sure to not miss out on the following deductions:
Student Loan Interest
If you are like most Americans, there is a good chance that you have a substantial amount of student loans that you’ve been paying off all throughout the year. Writing that check to the U.S. Department of Education or Direct Loans every month is definitely a buzz kill, but it is nice to know that you can write off the interest that you have paid on those loans. If you have paid over $600 in interest this past year on loans, you should receive form 1098-E in the mail. Whatever amount it states, is the amount you are allowed to write off on your taxes.
When most people think of deductions earned through charitable contributions, they only consider monetary contributions. While they are correct in thinking that these types of contributions can be written off, they aren’t the only ones – donated goods and even mileage can also be written off. So if you donated a pallet of items, don’t be afraid to write it off, and if you drove back and forth between a volunteer location on a regular basis, make sure to write off that mileage too.
Job Searching and Relocation
If you spent time looking for a new job this year, you can write off the amount of money that you spent job hunting as long as the job you are looking for is in a relative field. The amount you spend on job hunting must also be at least 2 percent of your adjusted gross income.
If you were one of the lucky people that got a job this year and it was outside of your current residence, the money you had to use to move can be written as a tax write off as long as your new job was 50 miles or more from your previous residence. Things you can write off include gas, meals while on the road, the cost of a u-Haul, and even accommodations so be sure to pull up those old receipts.
Filing for taxes is never a fun task, but getting it out of the way quickly can easily put a couple thousand dollars back in your pocket. So if your savings is low or your emergency fund is non-existent, get to filing those taxes and double check your deductions to make sure you are getting as big a refund as possible.