The only thing worse than paying taxes is over-paying taxes. And many of us do pay too much in taxes, enough that the IRS publishes a list every year of the most commonly overlooked deductions. Here are a few income tax deductions that are easy to claim and yield some big bucks.
Job-seeking expense tax deductions
If you were one of the millions of Americans looking for work in 2013, you can deduct part of job seeking expenses — with a few caveats. You can’t expenses incurred looking for your first job, or a job outside of your current field. Plus, your expenses must total more than 2% of your adjusted gross income. Qualifying expenses include employment agency fees, resume printing and mailing costs, and travel expenses. The IRS has posted more details, including more qualifying expenses, online.
Self-employed? Then you can deduct your Medicare premiums. However, you can’t claim this deduction if you have a job in addition to your business and your employer offers insurance, or if you are eligible for coverage over your spouses insurance.
State Income Tax Deduction
The end of the fiscal cliff negotiation restored the state tax deductions. You can deduct state income tax or state sales tax, whichever is larger. Not sure how much you paid in sales tax last year? The IRS has an app for that. And, bonus: you can deduct state taxes paid in 2011.
Sounds pretty sweet, given how high airline fees can get. Couple of caveats though: you have to be self-employed, and the fees have to be incurred on business travel.
You can find more info on in our income tax post from last year and at Kiplingers.
Sources: Kiplingers.com, IRS.gov