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Overlooked Tax Deductions

2013 -- Top 50 commonly overlooked deductions

The following list will serve as a reminder of some deductions you can easily overlook when you prepare your return. It is not intended to be all-inclusive, nor applicable to everyone. The circumstances of your situation will determine whether you qualify.

Miscellaneous deductions: deductible employee expenses, deductible expenses of producing or collecting income, and other deductible expenses.

1 Amortization of premium on taxable bonds 
2 Cellular telephones
3 Costs associated with looking for a new job in your present occupation, including fees for resume preparation and employment of outplacement agencies
4 Depreciation of home computers 
5 Dues to labor unions
6 Education expenses to the extent required by law or your employer or needed to maintain or improve your skills
7 Federal estate tax on income with respect to a decedent
8 Fees for a safe-deposit box to hold investments (e.g., stock certificate) 
9 Gambling losses to the extent of gambling winnings
10 Impairment-related work expenses for a disabled individual 
11 Investment advisory fees
12 IRA trustee's administrative fees billed separately
13 Personal liability insurance for wrongful acts as an employee 
14 Subscriptions to professional journals
15 Trade or business tools with life of one year or less
16 Legal fees incurred in connection with obtaining or collecting alimony 
17 Protective clothing required at work

Medical and Dental Expenses: medical expenses must total more than 7.5% of your AGI before you can take any deduction.

1 Alcoholism and drug abuse treatment
2 Contact lenses, eyeglasses and hearing devices 3 Contraceptives, if bought with a prescription 
4 Hospital services fees (laboratory work, therapy, nursing services and surgery) 
5 Lead paint removal 
6 Fees paid for childbirth preparation classes if instruction relates to obstetrical care 
7 Long-term care insurance premiums
8 Medical transportation, including standard mileage deduction and lodging expenses incurred for medical reasons while away from home (chapter 
9 Special equipment for the disabled
10 Special schools and separately stated fees for medical care included in tuition

Contributions: charitable giving 

1 Out-of-pocket expenses relating to charitable activities, including the standard mileage deduction 
2 Foster child care expenditures 
3 Appraisal fees for charitable donations or casualty losses 
4 Appreciation on property donated to a charity

Non-business casualty and theft losses: you may not deduct the first $100 of any loss, after $100 reduction the loss must exceed 10% of your AGI. 

1 Casualty or theft losses 
2 Theft or embezzlement losses 
3 Appraisal fees for casualty losses

Taxes you may deduct: 

1 Employee contributions to a state disability fund 
2 Foreign taxes paid 
3 Real estate taxes associated with the purchase or sale of property 
4 State personal property taxes on cars and boats

Interest Expense you may deduct: interest on borrowings to generate investment income, investment in passive activities, on money used to purchase or improve personal residence, used on active trade or business, and non-deductible personal reasons (i.e. credit card debt, or auto debt) 

1 Points on a home mortgage and certain refinancing 
2 Seller-paid points on the purchase of a home 
3 Margin account interest expense 
4 Mortgage prepayment penalties and late fees 

Self Employment deductible expenses 

1 Fifty percent of self-employment tax 
2 Health insurance premiums if self-employed 

And a few others: 

1 Penalty on early withdrawal of savings 
2 Worthless stock or securities 
3 Commissions and closing costs on sale of property 
4 Improvements to your home 
5 Cleaning and laundering services when traveling 
6 Employee's moving expenses