Most Overlooked Tax Breaks and Deductions

1. Most Overlooked Tax Breaks and Deductions www.ebservicesva.com

2. Americans overpay because they fail to take tax deductions for which they are eligible. Let’s have a quick look at even commonly overlooked tax credits and deductions that could be costing you money. www.ebservicesva.com

3. Here is what you can do to reduce this phase of tax phobia. • 1. State Sales Taxes – This deduction could be particularly important to you if you live in a state that does not impose a state income tax. You must choose between deducting state income taxes or state and local sales taxes they paid. • 2. Reinvested Dividends – If you’re like most fund owners, you reinvest these payments in additional shares of the fund; remember that each reinvestment increases your tax basis in the stock or mutual fund. That in turn, reduces the taxable capital gain (or increases the tax-saving loss) when you redeem shares in a taxable account. www.ebservicesva.com

4. 3. Child-Care Credit - A tax credit is much better than a deduction; it reduces your tax bill dollar for dollar. So missing one is even more painful than missing a deduction that merely reduces the amount of income that’s subject to tax. • 4. Out-of-Pocket Charitable Deductions - It’s not just cash donations that are deductible. Even if you donate goods or use your personal car for charitable work, these are potential tax deductions. Be sure to get a receipt for any cash donation over $250 and a detailed receipt for the donation of non-cash goods. www.ebservicesva.com

5. 5. Deduction of Medicare Premiums for the Self-Employed - Folks who continue to run their own businesses after qualifying for Medicare are eligible to deduct premiums paid for Medicare Parts B and D plus the cost of supplemental Medicare policies or the cost of a Medicare Advantage plan. • 6. Military Reservists’ Travel Expenses – If you are a member of the National Guard or Military Reserves, you can write off the cost of travel to drills or meetings. If you qualify, you can deduct the cost of lodging and half the cost of your meals, plus an allowance for driving your own car to get to and from drills. www.ebservicesva.com

6. 7. Gambling Losses - You may be qualified to claim a deduction for gambling losses if you were involved in legal gambling and won money or prizes during that tax year. This deduction is only available to the extent of your gambling winnings. www.ebservicesva.com

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