It’s tax season. Right now, you should be rounding up your information and double checking to make sure everything is in order. One thing that many forget to do is look for tax deductions that may be on the obscure side. An accountant or tax preparer can help you find these, but if you do your own taxes — even with tax preparation software — you may find that you miss some. Besides, it’s a good idea to have an idea of what sort of tax deductions you qualify for, and to have a basic understanding of how tax preparation works.
Now, it is important to realize that you may not qualify for everything on this tax deduction list:
- Reinvested dividends. In some cases, if you reinvest dividends that are paid out to you on your investments, you can deduct the amount from your taxes.
- Student loan interest.
- State sales tax.
- Child care credit. You will need the tax ID number for your provider, however. And it is only available within certain income brackets.
- State tax paid last spring. This would be great for me. Since we didn’t get a rebate on our state taxes, we can now take a deduction for them.
- Refinancing points. If you pay points when you refinance your home to a new low rate, you might be able to take a tax deduction.
- Travel expenses if you are military reservist.
Obviously, if you are in doubt, you should contact a tax professional. You can even find help at the IRS Web site.