Not All Tax Deductions Require Receipts, Experts Say
If you're not one to keep a shoebox of receipts, you might still be eligible for thousands of dollars worth of tax deductions -- all without itemizing. NY1's Tara Lynn Wagner filed the following "Money Matters" report.
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Taxpayers may not realize this, but there are a number of deductions that can be taken without having to itemize. Commonly called "below the line adjustments", they reduce your taxable income and your tax burden along with it. Number one on the list: Educator expenses, which can put a few hundred back into a teacher's pocket.
"Teachers are allowed to deduct up to $250 in out-of-pocket expenses off their tax return and what teacher do you know who doesn't have at least that much?" says Mark Steber of Jackson Hewitt Tax Services.
Also deductible is any money you put into a health savings account. And if you are self-employed, the cost of your health insurance should be deductible too.
"Not if they itemize. Not on their 'Schedule C' business form. If you are self-employed and paying health insurance premiums you get that deduction on your tax return," Steber explains.
It could also be in your best interest to deduct any interest you're paying on your student loans, provided you qualify.
"If you make $60,000 or more, as a single individual, the government does not allow you to take a deduction for student loan interest at all. But if you're a low income taxpayer and have these large student loans, it's good to know that you get up to $2,500 as a deduction," says Certified Public Accountant John Vento.
Got a new job in another part of the country? Great news! The government will congratulate you by allowing you to deduct your moving expenses.
"Simply if you've moved for a first job or new job. There are some mileage requirements for it but you can take a moving expense deduction for moving of your stuff," notes Steber.
Another life change that could trigger a deduction is divorce. The person paying alimony can deduct the amount they pay, while their ex has to pay taxes on that money. But keep in mind this is for alimony only. Child support payments are not deductible.
A full list of below the line adjustments can be found on the first page of the 1040, but where you won't find them is on the 1040EZ, meaning the easy way could ultimately be the expensive one.
"People that try to file the short form to save a little bit of money may be selling themselves short, and literally leaving if not hundreds, maybe even thousands of dollars on the table," says Vento.