10 Purchases You Didn’t Know Were Tax Deductible

Overpaying taxes is something that many people do without even knowing it. This is why it is extremely important to stay informed about purchases which are tax deductible.

Make the most out of your taxes this upcoming tax season!

Here are 10 purchases you probably didn’t know were tax deductible.

1. Out of Pocket Charitable Expenses or Contributions.

Most people don’t know that you can write off out of pocket costs that are incurred doing things for charities, such as purchasing ingredients for bake sales, driving your car to complete fundraising initiatives, and more.

2. Health Insurance Premiums

Medical expenses can put quite the strain on finances. Luckily, in certain cases where medical expenses are over 10 percent of a person’s Adjusted Gross Income (AGI), they can be deducted from taxes. That being said, if you are self-employed and have your own health insurance coverage, you may be eligible for a 100 percent deduction of the cost of the premium, which would be taken off your AGI.

3. Teacher Expenses

Teachers can deduct up to $250 for materials for their classrooms. This is subtracted from a teacher’s income.

4. Energy-Saving Home Improvements

If you make certain energy-saving home improvements to your primary residence, you may be able to take advantage of tax deductions. This includes solar energy stems, hydrogen fuel cell systems, and more.

5. Uniforms

Most people don’t know that people who wear a uniform to work can claim $1 per load of laundry (washing, drying, dry cleaning, etc.)! Anything over $300 requires receipts.

6. A Sold Home

If you sold your home in 2018, you are eligible to write off a total of up to $250,000 worth of profit individually, and $500,000 if you are married, although there are limitations based on timing, ownership, and use.

7. Mortgage Loan Interest.

Homeowners can also deduct the interest paid on mortgages for up to $750,000.

8. State Sales Tax

Those of you who live in states that don’t have income tax can deduct state income tax and sales tax from your federal income tax. This tax deduction is ideal for big expenses and is capped at $10,000

9. Used Equipment

Contractors who purchase used construction equipment can now make the best of new tax deductions which were only previously available for new equipment. Contractors can now deduct the cost of both new and used equipment the first year the equipment is used. This includes financed equipment.

10. Post-Secondary Education.

The Lifetime Learning Credit is a credit which allows you to deduct a maximum of $2,000 from post-secondary education tuition every year. This is based on 20% of the first $10,000 which has been spent on any type of education after high school.