Aside from the more common deductions you can take at tax time, you may be in the dark about other tax write-offs you could take. It pays to stay up to date on the deductions you can claim to save money on your taxes. Even if you’re big on wanting to pay your fair share, you don’t want to pay more taxes than you have to.
Jury Duty Pay
If you serve on jury duty, your employer may continue paying your regular wages for the time you miss work. The catch is you probably have to give your jury duty pay to your employer in return. While that may seem more than fair to you, the IRS will still expect you to report the jury duty pay you receive from the government as taxable income. But Uncle Sam isn’t completely unreasonable. The government understands that you don’t want to pay taxes on money you didn’t get to keep and allows you to deduct the money you give back to your boss on your tax return. Claim the deduction as an adjustment to income on Form 1040 in the total on line 36. Write in "Jury Pay" and the amount on the dotted line.
Deductions for Military Reservists
If you’re a member of the National Guard or military reserve, you may be able to deduct your travel expenses to and from the drill site. You have to travel more than 100 miles from home and stay away overnight. The good news is, if you qualify, you can deduct half the cost of your meals, the cost for a motel or hotel, and the standard mileage rate for driving your own vehicle. You can also deduct parking fees and tolls. While you don’t have to itemize deductions to get the write-off, you do have to claim qualified expenses on Form 2106 or Form 2106-EZ and carry the total over to Form 1040. The deduction reduces your adjusted gross income. In addition, military pay that members of the National Guard or Reserves who are on active duty receive while serving in a combat zone is nontaxable.
Uncommon Travel-Related Expenses
If you travel a lot on business, the extra baggage fees that the airlines charge are costing you money. To help you out, the IRS allows you to include the baggage fees you pay when figuring your unreimbursed employee travel expenses. Keep all your receipts so that you can prove that you were traveling on business. Calculate the deduction by completing Form 2106 or 2106-EZ. Deduct only those itemized miscellaneous deductions that exceed 2 percent of your adjusted gross income. Miscellaneous expenses include job-related travel expenses. Carry over your allowable deduction to Form 1040 Schedule A.
Student Loan Interest Your Parents Pay
If your parents are paying back a student loan that you took out to help pay for college, you can claim the interest deduction at tax time. Your parents may be footing the bill and repaying the debt, but the IRS sees it as if they gave you the money to pay the loan. As long as your parents no longer claim you as a dependent, you qualify to deduct up to $2,500 of the student loan interest that they pay. No one can claim your spouse as a dependent if you are filing a joint return. If your parents paid less than $2,500 student loan interest, deduct the amount of interest they actually paid during the tax year. You don’t have to itemize deductions on your tax return to get the write-off. Take the student loan interest deduction as an adjustment to income on Form 1040.
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