As you’re getting your 2014 tax returns in order, you’ll want to be sure to claim every tax deduction and credit you’re entitled to take. It’s easy to miss some, however. So here are a few write-offs that could save you hundreds — if not thousands — of dollars when filing your ’14 taxes:
You know, of course, that charitable contributions are tax-deductible if you itemize, but you may not realize how broad the definition of “charitable contribution” is.
For instance, if you contributed supplies to use in a soup kitchen, you can write them off. If you volunteered at a charity and drove there, you can deduct 14 cents a mile or, if you have documentation, your actual costs of gasoline (gas, parking and tolls).
(MORE: Obamacare and Your Taxes)
If you’re unsure of the value of a non-cash charitable contribution (Form 8283 if they’ll exceed $500 in total), such as clothes or furniture, generally the Internal Revenue Service will accept fair market value — what someone would pay for it in a store.
So if you donated clothes, you probably won’t be able to deduct what you originally paid for them. If you donated a car, you can determine its value for tax purposes by using online pricing guides such as ones on the sites of Kelley Blue Book and NADA Guides.
If you received any goods, services, merchandise or event admission (such as for a charity balls) in exchange for your charitable donation, you can only deduct the difference between what you gave and the benefit you received. For example, if your $100 gift got you free admission to a baseball game where tickets normally cost $40, you’d only be able to deduct $60 from your income.
Eco-Friendly Home Improvements
If you made your home more energy efficient in 2014, you may qualify for a hefty tax credit. Generally speaking, installing energy-efficient gas furnaces, air conditioning, windows, doors, insulation and solar panels qualify.
However, there are limitations to the government’s generosity. Your credits can’t exceed:
- $500 for all credits earned since 2005
- $300 for an air conditioner
- $200 for windows installed since 2005
- $150 for a qualified natural gas, propane or oil furnace or hot water boiler
- $50 for an advanced main air-circulating fan
Solar improvements have no maximum as long as they meet the Department of Energy’s requirements.
File for these credits on Form 5695, “Residential Energy Credits.”
Self-Employment Business Expenses
If you were self-employed last year, you can write off most business expenses as long as they were appropriate and helpful for your operations — and the IRS is pretty forgiving in its definition of appropriate and helpful.
For example, a pair of junkyard owners placed cat food around their property to attract rat- and snake-killing felines. Because the expense helped improved the safety and quality of their business, TurboTax says, they were allowed to deduct the cost of cat food on their tax return. Then there was the bodybuilder who deducted body oil because it was a necessary expense for his competitions…
Claim your self-employment unreimbursed business expenses on Schedule C, “Profit or Loss from Business.”
One thing to keep in mind: The IRS trimmed the standard mileage rate for business use of a car from 56.5 cents a mile for 2013 to 56 cents a mile for 2014.
Education Credits and Deductions
You may be able to lower your taxes by claiming an education credit if you or your spouse went back to school last year or if you had a child in college.
The American Opportunity Credit provides up to $2,500 of tax relief per undergraduate student for things like tuition, housing and books. However, individuals whose incomes were above $90,000 and married couples filing jointly with incomes over $180,000 are ineligible.
There’s also the Lifetime Learning Credit of up to $2,000 and grad students can take this one (but the cost of books can’t be written off; just tuition and fees). To claim this credit, your 2014 income had to be under $64,000 if you were single or $128,000 for married couples filing jointly.
You can’t claim both credits for the same person, however. To get either write-off, file Form 8863, “Education Credits.”
Alternatively, you could deduct up to $4,000 worth of tuition and fees (as long as you’re not claiming either of the education credits) and up to $2,500 in student loan interest.
You don’t have to itemize for either of those. But to get them, your 2014 income had to be less than $80,000 if you were single or $160,000 if you were married and will file a joint return. Claim the tuition and fees deduction on Form 8917 and student loan interest on the 1040 or 1040A.
If you looked for a job last year, you can write off some of those expenses, too. Things like employment agencies fees, travel expenses (such as leaving town overnight for an interview) and preparing and mailing your resumé qualify —as long as they, and any other miscellaneous deductions you had, exceeded two percent of your 2014 adjusted gross income.
However, you can’t claim them if there was a “substantial break” between your last job and your new one. The IRS doesn’t define how long a “substantial break” is, but you should be safe if you started looking for work shortly after leaving your last job.
Also, you’re not eligible for these deductions if you were searching for work in a different field, the IRS says.
Apparently, the tax man hasn’t heard of second careers.
Steven Richmond is a freelance writer who formerly worked as a government and business reporter and as Editor-in-Chief of BadCredit.org and CardRates.com.
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