Once upon a Tax Time

I once thought that I’d be an accountant and was well on my way to making it happen when I realized that’s not what I wanted to do with my life at all, so I switched gears and went into operations and eventually entrepreneurship. But taxes are one of those things that occur no matter what role you play.  And this time of year, brings tension and fear for a lot of people. As the TAX deadline is fast approaching, hopefully you’re well on your way to having your taxes complete, unlike me who’s just getting started 😊. Although, Taxes can be a headache, being familiar with some common overlooked deductions may help.  I’ve used a few of these today as I muddle through the forms; 3 & D & Parts I, II, & III. Ah the joy it brings; (insert maniacal laugh). 😉 I hope these help you cross the finish line Tuesday, April 15^th, 2025 with maybe just a little extra in your coffers!  Love, Monamie

Charity

• Property donated to a recognized charity
• Cash contributions to a recognized charity
• Out-of-pocket expenses incurred for volunteer work
  • If you had to drive for your volunteer work, you can deduct expenses one of two ways.
    • Deduct the actual cost of gasoline OR Deduct 14 cents per mile.
• Donations to a qualified charity at the Holidays
• Charitable contributions through payroll deduction or social media
• Fourteen cents per mile for miles driven while doing volunteer work
• Expenses up to $50 per month for an exchange student living with you
• Donations to a food bank of leftover food from a reception (ex: wedding).
• Wedding dress or other clothing donation to a qualified charity

Legal

• Legal fees for actions involving unlawful discrimination
• Legal fees paid in connection with an IRS Whistleblower award
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Medical, healthcare, and disability

• Medical transportation
  • including tolls, parking, and the standard mileage deduction of 18 cents per mile for healthcare
  • including visiting doctors and dentists, and picking up medicine
• Nursing home expenses that are primarily for medical care
• Medical aids such as crutches, canes, and orthopedic shoes
• Hearing aids, eyeglasses, and contact lenses & the supplies to maintain them
• Hospital fees for services such as nursing, physical therapy, lab tests, and x-rays
• Equipment for disabled or handicapped individuals
• Part of life-care fee paid to retirement home designated for medical care
• The cost of alcohol, drug abuse, and certain stop-smoking treatments
• Special school costs for mentally or physically handicapped individuals
• Wages for nursing service
• MSA or HSA contributions
• Adjustment on Form 1040 of health insurance premiums for some self-employed persons
• Medicare premiums
• Impairment-related work expenses for a disabled person
• Mandatory contributions to state disability funds
• Cost of health insurance premiums, not part of the Premium Tax Credit, Adjustment for some self-employed persons
• Cosmetic procedures
  • Cosmetic surgery necessary to improve deformity from (or directly related to) a congenital abnormality, an injury from an accident or trauma, or a disfiguring disease
  • Breast implants can be claimed as a business deduction
• A doctor’s note could also allow: (for example)
  • Cost of quitting smoking
  • Cost of losing weight
  • Cost of swimming pool for arthritic suffers
  • Cost of Clarinet to correct an overbite
  • Cost of Special Shoes to correct walking
  • Cost of Tutoring to address learning disabilities

Property

• Casualty losses in a federally declared disaster area
• Points paid on mortgage or refinancing

Investments           

• Penalty on early withdrawal from a savings account
• Deduction of IRA contributions
• Worthless stock or securities
• Amortizable bond premiums
• Penalty on early withdrawal of savings

Taxes

• One-half of self-employment tax paid
• State income taxes owed from a prior year and paid in the current tax year
• Last quarter estimated state taxes paid by December 31
• Personal property taxes on cars, boats, etc.
• Real estate taxes
• State and local income or sales taxes
• Taxes paid to a foreign government

Miscellaneous

• Student loan interest
• Gambling losses to the extent of winnings
  • Losses for scratch-off tickets are deductible.
  • Losses from gambling at a casino are deductible.
  • Even losses from betting on the Super Bowl or races qualify as deductible expenses.
• Jury pay given to an employer
• Travel expenses for military reservists
• Moving expenses for active-duty military moving under Permanent Change of Station (PCS) orders
• $300 of unreimbursed classroom expenses for teachers of grades K-12
• Nontaxable amount of Olympic and Paralympic medals & USOC prize money
• Repayments of supplemental unemployment benefits under the Trade Act of 1974
• Penalty on early withdrawal of savings
• Animal expenses
  • A bona fide service animal, such as a guide dog used by someone who has a visual or hearing impairment or a physical disability, is deductible. The cost to buy, train and maintain (food, grooming, vet care) a service animal under these circumstances is generally deductible as a medical expense, according to IRS guidelines. If you foster an animal for a qualified 501(c)(3) pet adoption or rescue organization, you may also be able to write off certain unreimbursed expenses such as pet food and vet bills. And if a cat keeps your business free from rats, or a guard dog protects your business from thieves, you might be able to deduct some of the expenses for its care.

 “If it can be associated with some sort of income, [it] was allowed,” says Mark Luscombe, principal analyst at Wolters Kluwer Tax & Accounting.

** Keep ALL RECEIPTS! Attach them to your return and file for 3 years

IRS imposes additional and new requirements annually.  Please check IRS Publications to ensure up to date information.

Info courtesy of AARP.org; Kiplinger.com; jacksonhewitt.com