Many Americans believe they need to be wealthy to benefit from tax deductions. However, there are some tax deductions the average American can benefit from, so choosing your standard tax deduction may not be the best idea for everyone. If you want to uncover tax deductions you could be taking advantage of, be sure to read on!
Deductions for Teachers
If you are in the teaching profession, you may be eligible for several tax deductions, especially if you have spent your own money on classroom supplies. If you have bought classroom supplies with your own cash, you could claim those expenses as a tax deduction.
Teachers can claim up to $250 for teaching supplies, materials, books and software; this amount can increase if your spouse is a teacher as well. If your partner is a teacher who also spent money on classroom supplies, you could claim up to $500 on your joint tax return.
If you are facing out-of-pocket expenses exceeding the amounts stated above, you could still deduct it as employee business expenses, more specifically as a miscellaneous itemized deduction. However, you can only deduct out-of-pocket expenses that exceed 2% of your AGI (Adjusted Gross Income).
Deductions for Military Reservists
Military reservists who traveled for their job in 2016 can deduct them regardless of their income. However, there are some requirements that need to be considered. Firstly, the expenses must be for travel that exceeds more than 100 miles from your residence. There are also limits for car expenses, parking and transportation fees. To claim these deductions, you also need to fill in and attach form 2106 to your tax return.
If you have contributed to a health saving account and were enrolled in high-deductible health insurance plans, you could claim on them, more specifically as an adjustment to income. Any deductions relating to these insurance plans can be claimed on form number 8889.
Anyone who had to relocate for their job could claim their moving expenses, again as an adjustment to income. Like other claims that can be considered “above the line” deductions, your moving expenses must meet certain requirements if you wish to claim them.
To claim on your moving expenses, you must meet certain time and distance requirements. To claim, you must have relocated at least 50 miles away from your old residence and the relocation must be directly related to your employment. More requirements regarding this claim are found on form 3903.
If you are self-employed, there are numerous things you could deduct. Firstly, you could deduct 50% of your self-employment tax. Of course, you could also get some deductions from retirement plans and health insurance. Some of these deductions also qualify as adjustment to income deductions.
You do not have to be wealthy to claim on your tax return, because above the line deductions and adjustments to income could save you quite a few dollars. So, be sure to check if you qualify for some deductions before you decide to choose the standard tax return over itemizing your taxes.