Switch to Desktop Site
 
 

Tax deductions: 12 ways to save, from mortgage interest to moving costs

Next Previous

Page 2 of 3

About these ads

Bad debts. If someone owes you money you can't collect, you may be able to adjust your taxable income downward. "To deduct a bad debt, you must have previously included the amount in your income or loaned out your cash," the IRS says. So you can't deduct when, say, you do work and never get paid for it. The IRS also says money you lend to a relative or friend, with the understanding that it may never be repaid, is a gift rather than a loan.

Moving expenses. If you're a member of the armed forces, moving expenses are deductible. Or, if you moved because of a job switch, related expenses may be deductible if the new workplace is at least 50 miles further away (from your old home) than your previous workplace was. You also need to keep working for at least 39 weeks after arriving in your new home.

Education expenses. A student loan interest deduction (up to $2,500) and a tuition-and-fees deduction (up to $4,000) are available for you or a spouse or dependent, even if you don't itemize other deductions on your return. School teachers can use an "educator expense deduction" for up to $250 in unreimbursed expenses.

Alimony. You can deduct alimony payments, but the IRS doesn't give any deduction for child-support payments.

Disaster losses. The IRS casts a helpfully wide net on this one, including theft or other unusual events "such as a flood, hurricane, tornado, fire, earthquake or even volcanic eruption." Generally you may deduct related losses of property relating to your home, household items, or vehicles. But the tax agency says that for losses covered by insurance, you must file timely claims and reduce the deduction by the amount of any reimbursement.

Home mortgages. Yep, this is the ever-popular mortgage interest deduction, which pushes many families into the "itemizing" category. In addition to deducting the interest portion of monthly home payments, you can also deduct a "points" fee paid when taking out the home loan.

Next Previous

Page:   1   |   2   |   3


Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.

Share

Loading...