It’s officially tax season, which means the annual ritual of crunching numbers, filling out forms, and hoping for a refund or, at the very least, minimal taxes is upon us! Tax season often feels like navigating a labyrinth of rules and regulations without a map, so we’ve decided to help you out.
Navigating Tax Season
From unexpected health-related deductions to unique business expenses, we’ve compiled a list of surprise tax exemptions that could potentially save you money. Let’s dive in!
Investing in Education
Tutors: Investing in your child’s education can often have tax benefits. If your child has a learning disability like dyslexia, the costs associated with hiring a tutor can be claimed as a medical deduction.
Turning Bad Debt into a Tax Deduction
Friends That Owe You: Loans gone sour? If you’ve lent money to a friend and there’s little hope of repayment, there’s a silver lining. You can write off the unpaid amount as a bad debt – a small consolation for the lost funds, but a consolation nonetheless.
Kick the Habit, Save on Taxes
Quitting Smoking: Did you know that you can get healthier while saving money on taxes? If you’re ready to kick the habit, the costs of quitting programs, prescription patches, or drugs to help you quit smoking are deductible. However, over-the-counter patches and other items are not eligible for this deduction.
Bodybuilders Rejoice
Body Oil: Fitness enthusiasts, rejoice! The expenses for body oil used in professional lifting activities are recognized as legitimate expenses eligible for tax write-offs.
Ransomware Remedies
Computer Viruses: If your business has been involved in a ransomware attack (when hackers lock your computer or files and demand money for their release), this can be deducted as a business expense, although you’ll have to show proof of the attack.
Deducting Crime Expenses
Crime-Related Losses: Businesses have historically been able to write off losses from more conventional crimes like embezzlement and robbery, and experts say ransomware payments are typically accepted nowadays as well.
Furry Friends Tax Benefits
Owning a Service Animal: If you have a service animal, like a guide dog or an assistance dog, the IRS says you might be able to get some help with the costs. The money you spend to buy, train, and take care of your furry friend could be tax-deductible as a medical expense. It’s worth noting that this doesn’t extend to emotional support animals.
Making a Splash
Swimming Pools: While not your typical deduction, in certain cases, the installation of a swimming pool can be deductible, especially if it’s prescribed by a physician for medical reasons like arthritis.
Deducting a Swimming Pool
To qualify, you must demonstrate that no one else uses the pool, and eligibility may hinge on your ability to travel and access other pools. One thing to keep in mind is that if the pool increases the value of your home, you must subtract that amount from the amount you deduct.
Beauty with Benefits
Cosmetic Procedures: Surprisingly, under certain circumstances, cosmetic surgeries aimed at correcting deformities arising from congenital abnormalities, accidents, or disfiguring diseases are considered eligible medical expenses.
Tree Care and Tax Breaks
“Exceptional” Trees: In Hawaii, the preservation of certain tree species, like the Norfolk Pine, is incentivized with tax deductions. People can deduct up to $3,000 in caretaker costs for Norfolk Pines, which are deemed “exceptional trees.”
Deductions for Exceptional Trees
These costs include maintaining “a tree with historic or cultural value or that, by reason of its age, rarity, location, size, esthetic quality, or endemic status, is worthy of preservation.”
You need to include a notarized declaration from a certified arborist in order to claim the discount.
Weighing In
Losing Weight: Shedding pounds could potentially shed some tax burdens, too. Weight loss programs prescribed by a doctor for obesity are sometimes deductible as medical expenses, as obesity is classified as a disease in the U.S. tax code.
Music to Your Ears
Selling Songs: For the creative minds in the music industry, songwriters can benefit from capital gains tax rates when selling catalogs of songs, offering a tax advantage compared to income tax rates.
This incentivizes creativity and entrepreneurship in the music industry while providing tax relief for artists.
Family Planning Costs
Pregnancy Tests: Yes, even pregnancy tests can qualify for a deduction, as explicitly stated in the tax code, and there’s no requirement for the test to be administered by a physician.
Maximizing Your Tax Refund
Keep these unexpected exemptions in mind as you go through tax season – who knows, you might discover a deduction that could make a significant difference to your finances!
Consulting a Professional
Remember to consult a tax professional to ensure your filings are accurate and don’t break any IRS rules. When it comes to taxes, every penny counts!
The post Slash Your Taxes: 13 Deductions You’re Probably Missing Out On first appeared on Liberty & Wealth.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
