Everyone wants to pay as little tax as possible, but for that to happen it is necessary to take every deduction one qualifies for. Here are a few deductions that people often overlook.
• Other Charitable Gifts: In addition to money you donate to charity, you can deduct the cost of travel if you use your vehicle to perform charitable work. You can also deduct the cost of supplies you buy for a charitable project, or a uniform you wear as a volunteer.
• Moving Costs: A taxpayer may deduct the cost of moving when relocating for a new job, or a first job, as with a recent college graduate who gets a new job in another city.
• Job Hunting Costs: An already-employed worker may deduct the cost of looking for a new job in the same occupation. This may include costs for preparing a resume or employing an outplacement agency, if the deductions are itemized.
• Child and Dependent Care: The child and dependent care credit can help cover the cost of after-school day care or summer day camp. It can also be used for an adult dependent who needs care while the taxpayer works.
• Mortgage Refinance Points: When purchasing a new house, one can deduct the points paid on the loan. However, one can also deduct the points when refinancing a home loan, as long as the proceeds from the refinanced mortgage are used to improve one’s principal residence.