To get more money back from Uncle Sam, consider putting in the extra work to itemize your deductions. According to the most recent IRS data from 2009, about 45 million Americans claimed more than $1 trillion in deductions by itemizing on their 1040s. Meanwhile, an estimated 92 million taxpayers claimed $700 million through standard deductions—but some who took the easy way out might have cost themselves.
To help you get the most from your tax return, U.S. News consulted four certified public accountants: Steven Albert of Glass Jacobson in Owings Mills, Md., Melissa Labant of the American Institute of CPAs, Dennis Newman of Sharrard, McGee, & Co. in Greensboro, N.C., and Sandy Stolar of EisnerAmper LLP in New York City. They identified the deductions taxpayers most frequently miss:
Medical and dental care expenses.
Currently, individuals are allowed to deduct medical and dental expenses on their tax return if the costs exceed 7.5 percent of their adjusted gross income (AGI), but that threshold will be increased next year to 10 percent as a result of the Patient Protection and Affordable Care Act. Eligible medical deductions are expenses incurred under a doctor’s prescription. In other words, “if you just want to take vitamins, you can’t deduct that,” notes Albert.
People often forget to deduct travel expenses incurred to receive medical care, says Stolar. If you can’t make the trip on your own, a portion of a companion’s lodging expenses may be eligible for a medical deduction as well.
Child and dependent care credit.
Although this isn’t technically a deduction, it’s a valuable tax credit that’s frequently overlooked. If you have a dependent child (or children) younger than 13, you may be eligible for a credit for the costs of a childcare provider and certain childcare programs. Eligible childcare programs include before- and after-school care and day camps, but not overnight camps. For married couples to qualify, both spouses must work, or the non-working spouse must be a student or disabled. Parents with one child are eligible for a credit based on the first $3,000 of childcare expenses, and parents with two or more children can get a credit of up to $6,000.
Contributions to charity
Check and cash contributions to charities are generally fully deductible up to 50 percent of your adjusted gross income. Labant says people are fairly good about keeping track of those donations, but many don’t deduct for costs incurred while doing work for a charity
Written by Vanessa Daniel Bortz , Real Estate Agent in Essex County.