By: Asha Inamdar and Nupur Desai
Want to save more on your 2019 taxes? Then don’t forget these deductions:
1. Charitable Deductions:
- You can claim any out-of-pocket expenses on your taxes that you incurred while providing charitable services.
- Keep receipts for your expenses. If your annual expenditure is more than $250, you will need documentation to support that. You can deduct up to 14 cents per mile plus parking and tolls paid when you drive your car for any charitable work.
2. Jury Duty Unreimbursed
- Employees who need to give up their jury duty pay to their employer can now deduct the amount paid to their employer on their taxes.
- Employers who collect such jury fees will need to report them as taxable income.
3. Credit for Dependents
- There is a separate $500 credit for dependents who do not qualify for the $2,000 child tax credit.
- You can even claim this credit when providing care for older relatives.
- The combined total of child tax credit and credit for other dependents is phased out if your adjusted gross income is more than $200,000 (or $400,000 for married filing jointly).
4. Airline Baggage Fees
- If you’re self-employed and travelling for business reasons, you can now deduct baggage fees as a travel expense.
5. Home refinancing
- When you buy a house, you can deduct in full the points, or fees that you incur to obtain the mortgage, in one lump sum. When you refinance the loan however, you can deduct the points paid for the loan so far at the time of refinancing.
- If you use part of the refinanced loan to improve your home, you may deduct points paid for improvement (during that same year) and the rest over the life of the loan as mentioned above.
- In the year you pay off the loan, you can claim all the un-deducted points paid.
Exception: If you refinance an already-refinanced loan from the same lender, then you get to deduct the new points paid for the refinancing over and above the previously un-deducted points, over the life of the new loan.
5. Private School Tuition (K-12)
- You can use your savings account previously used for only college tuition to pay off your child’s private school bill.
- The 2017 tax reform law allows tax-free distributions from 529 savings plans of up to $10,000 per student per year to pay tuition for kindergarten through 12th grade at religious and other private schools. Tuition can be paid from multiple 529 plan accounts, but the total amount can’t exceed the annual limit.
There are many ways that you may be able to maximize your tax savings. For personalized tax advice, contact a trusted Chugh CPAs, LLP professional.