Seven Surprising Tax Write-Offs That Could Get You A Larger Refund
The dreaded process of doing your taxes can be made a little more bearable by the prospect of getting some cash back in your tax refund.
There may be some little-known deductions that you’re overlooking. And these write-off could help you get the most out of your refund.
Kelley Long, a certified public accountant and financial planner at Financial Finesse, told INSIDER that taxpayers should keep in mind how the new tax law will affect these tax write-offs.
“Most of these are available for 2017, but are no longer available for 2018 and going forward under the new tax law,” Long said.
Here’s how to take full advantage of any of these deductions you might be eligible for — at least for this year.
1. Your Job Hunting Expenses
“If you are searching for a job in your current career, you may be able to deduct expenses such as resume-writing help, networking events, travel expenses (like if you take a trip to interview for a job), meals to discuss job opportunities and agency fees if you pay someone to search for you,” Long said. “Most people don’t think of this as a deduction, especially since it doesn’t apply if you’re switching careers or have been out of work for a long time, but it’s worth at least going back to add up costs for 2017.”
It’s important to note that these are considered miscellaneous deductions, which are only deductible if they make up more than 2% of your adjusted gross income, Long said. “So it’s rarely used, but if you have lots of other miscellaneous deductions, it could apply,” she said.
This will be the last year you can write off these expenses, as this particular deduction was eliminated in the new tax law, Long said. The IRS offers more information to help determine whether you can take this deduction.
2. Your Home Office
“If you work out of your home for the convenience of your employer, you may be able to write off expenses directly attributed to the space, as well as a percentage of other home costs like insurance, cleaning fees, utilities, etc,” Long said.
The IRS rules are very specific about what types of spaces qualify, she added. “And this could be a red flag for audit, so don’t fudge it,” Long advised. This deduction was also nixed in the new tax law, so you won’t be able to write off many of these expenses next year, she added.
3. Moving Costs If You Relocated For A New Job
“If you move for a new job and your new employer doesn’t reimburse you, you can write off the expenses like a moving truck, boxes, storage, transport of pets, etc,” Long said. “You have to move far enough so that your new commute is at least 50 miles further from home than your old commute and you have to have switched jobs within the past year of your move, but a lot of people who find new jobs in other cities don’t realize that they get a deduction for their costs.”
This is an above-the-line deduction, which means it has a bigger impact on your taxable income and also doesn’t require meeting a minimum amount to be valid, Long said. This write off is another one that you won’t be able to use when you do your taxes next year, she added.
4. Your Cell Phone And Internet Bills
If you have a side gig (and you get a 1099-MISC tax form), you might be eligible to write off some of your cell phone and internet costs.
“For example, if you earn a little cash on the side coaching a kids’ sports team and are paid as a contractor, that’s considered self-employment income,” Long said. “Chances are you use your cell phone and home internet to conduct at least some business related to that position, so you can deduct a portion of those expenses against your coaching income.”
Keep in mind that you should be able to back up the number you settle on, she said. “So don’t just put 50% unless you can prove that 50% of your phone and home internet usage is for your side gig,” Long said, which is unlikely unless it’s your main gig. This particular deduction will remain in place for 2018’s taxes.
5. Hurricane Damage
If you were living in parts of Florida, Texas, Louisiana and other areas during the 2017 hurricane season and your home was damaged in a storm, you might be able to benefit from this one.
“This helped some of our clients in Florida and Texas, especially ones that would never be able to itemize in other cases,” George Dimov, a certified public accountant in New York City, told INSIDER. Non-homeowners in states with no state tax often do not itemize, he said.
For further information, you can check out this IRS page which gives 10 tips for deducting losses from a disaster.
6. Mileage On Your Car
Do you have to sometimes use your car for work — apart from just getting there? You might be able to write off those miles you rack up.
“If you are required to go to tertiary locations in the course of your employment, you can write off standard mileage deduction for the vehicle,” Dimov said.
7. You Service Dog’s Food And Vet Bills
You can deduct expenses for a service dog or other service animals if you are visually impaired or hearing disabled or have another physical disability, Jonathan Pineda, a senior tax analyst at TaxPlus, told INSIDER.
You can write off the costs of buying, training and “maintaining” the dog, which includes food, grooming, and veterinary care. It’s important to know that this does not apply to therapy animals, Pineda said.