Why Should You Concentrate on Miscellaneous Tax Deductions?

[chandan tiwa]

Miscellaneous tax deductions might not save you a bundle of money on their own, but you should be interested in the totality of your tax liability miscellaneous. For this reason, you want to save all that you can. Some of these deductions may apply to you at the time you file your income tax return.

For instance, there is a deduction for expenses not reimbursed to employees. There could be deductions for things like gasoline and mileage for travel on behalf of your employer, meals taken on the road, clothing, and even entertainment. Any expense that could be considered ordinary and necessary for doing business on behalf of an employer could qualify for this deduction, as long as you were not reimbursed for the expense. These expenses must be in excess of 2% of your adjusted gross income in order to qualify.

If you paid someone to prepare you taxes, you can deduct those fees as long as they are in excess of 2% of your adjusted gross income. This can include tax publications, computer software, and electronic filing fees. Taxpayers often overlook this particular miscellaneous deduction.

You can deduct gambling losses on schedule A of your income tax return. This deduction is limited to the amount of gambling winnings you took in at the casinos. In other words you cannot report that you lost more than you won. I know that sounds unrealistic to any of us who have ever gambled, but there it is.

Although there is a particular deduction for theft and casualty on schedule A, there is an allowable miscellaneous deduction for casualty and theft of income producing property. The causes of loss could be fire, theft, storm, or vandalism. Income producing property can be art work stored for investment, stocks, bonds, coin collections, etc.

There are lots of possible miscellaneous deductions, like impairment related work expenses. Impairment related work expenses are any special expenses you incur to aid you to be able to work if you are disabled.

You can even claim a deduction for an un-recovered investment in an annuity.

There are so many of these miscellaneous deductions that might apply to you that it is a good idea to talk them over with an income tax expert in the course of filing your return politics. Such an expert should be thoroughly equipped to help you determine which miscellaneous deductions you can find in order to help lower your tax liability as much as possible.

Taking advantage of all available deductions on your tax return is an ideal tax planning tip. Many times due to ignorance or negligence, you lose money. Always ensure that you pay only the exact amount of tax. Chintamani Abhyankar explains.