IRS Tax Deductions

• Teaching aids and supplies (not reimbursed)
  A teacher can claim up to $250 for teacher aids and supplies that have been purchased for their class. If these expenses were reimbursed (or will be), they cannot be deducted from income.
• Non-reimbursed expenses incurred by an employee, reservist, performing artist, or fee-basis government official
  Your tax professional will tell you if all your expenses are actually deductible. Employees may be able to claim a portion of their non-reimbursed expenses required by their employer.

  These expenses include cost of additional driving after arriving at work. It is important to keep a travel log which includes date, number of miles, destination, and purpose of travel.
• HSA (Health Savings Account) contribution
  You qualify for a Health Savings Account if you have a high-deductible health insurance plan and are not eligible for a low-deductible plan through an employer.

  An HSA account can be easily set up online through several different banks. If the account is set up prior to December, you may be able to deduct your contribution for the current tax year. Contributions made to an HSA account between January 1 and April 15 can be claimed as a deduction for the current year or previous year. There is a maximum allowable HSA contribution depending on whether you have individual or family health coverage.
• Moving costs (if location is 50 miles further than current commute and employed full-time for 10 months in the new location)
  Keep a record of all moving costs, such as: packing supplies, lodging, transportation, storage, and temporary housing at the new location. Only the final moving costs are deductible. Cost of food during the move is not deductible.
• One-half of self-employment tax
  If you receive wages, but are not an employee, you will probably need to pay self-employment tax. This pertains to all taxpayers, not just those who own a business. One-half of the SE tax is an expense of the business, but is claimed as an adjustment to your income instead of a business expense.
• Contributions to retirement accounts (other than the Roth IRA or Roth 401k)
  Retirement accounts that are included on the tax return and deductible in the year of contribution (including the following period of January 1 - April 15, if desired) are the SEP (Simplified Employee Pension), SIMPLE retirement plan, and IRA (Individual Retirement Account.)

  A 401k and 403b Retirement Account is managed by an employer; therefore, the amount is already deducted from wages shown on the W2.
• Health insurance (if self employed)
  Medical expenses, including health insurance, may be partially deductible is you costs were high and exceed 7.5 percent of your gross income (after subtracting qualifying deductions.)

  Generally, a person who owns a home is more likely to be able to deduct medical expenses due to the cost of mortgage interest and property tax.
• Penalty charged by a bank for early withdrawal of savings
  This is not the penalty charged by the IRS for withdrawal of retirement savings prior to age 59 and one-half.
• Alimony paid
  Alimony is a set amount paid each month for 3 years or less and require by the court. If you paid alimony, you do not have to pay tax on that amount of income. However, you will need the social security number of the recipient.

  Alimony received is taxable.
• Interest paid on a student loan
  The student loan needs to be for education obtained from an accredited college.

  The student loan interest deduction is reduced or unavailable for high-income taxpayers.
• Cost of higher education or college expenses
  Only include these expenses as an adjustment if you are not claiming an education tax credit in the “Tax and Credits” section. This is usually more beneficial for those in a tax bracket higher than 20%.
• Losses on the sale of stock
  Although this is not an actual expense, in the “Income” section of the tax return you can include up to $3000 in capital loss each year from the sale of stock or property. Additional losses can be carried forward indefinitely.