Individual Tax Return Deductions

By Kristen Daunt

As I started my career as a tax accountant and began working on individual tax returns, I learned about multiple individual tax return deductions individuals can take advantage of on their returns. I couldn’t help but think there are many items individuals pay for throughout the year that they may not realize they can actually take a deduction for on their federal individual tax return.

Individual Tax Return Deductions:

1) Sales Tax. If you itemize your deductions, you have the option of deducting either the state and local income taxes or the state and local general sales taxes paid. If you live in a state with no income tax or if you made a large purchase during the year, such as a car or engagement ring, it may be more advantageous to deduct your sales taxes.

2) Charitable Gifts. While most people are aware that there’s a deduction for charitable contributions, many may not be taking full advantage of this deduction. Individuals can deduct out-of-pocket expenses for charitable work. It’s always helpful to save receipts for all expenses.

3) Volunteer Expenses. Although you can’t take a deduction for your time volunteered, you may be able to take advantage of other deductions related to volunteer activities, such as mileage and travel costs. You can deduct the cost of getting to and from the location you volunteer at when using your vehicle or use the IRS standard mileage rate (currently $0.14) for charitable organizations.

4) Babysitting Fees. You may be able to deduct child care expenses paid while you work or look for work, provided you meet certain criteria. This can include fees paid to a babysitter or the cost of daycare. It’s always important to retain documentation of payments.

5) Job Search Expenses. While it’s upsetting to lose a job, and stressful to find a new one, you may be able to deduct some of your job search expenses. The mileage put on your car driving to and from interviews and the cost of recruiters may add up so it might be worth looking into the deduction, as long as you’re searching for a job in the same line of work as that of your most recent job.

6) Moving Expenses. If you’re moving more than 50 miles away for a new job, you may be able to deduct some of the costs of getting yourself and your belongings there. You can take advantage of this deduction even if you don’t itemize, so it’s definitely something to keep in mind should you find yourself in this situation.

7) Teaching Expenses. Most teachers end up delving into their own pockets for classroom supplies throughout the year. If you’re a qualified kindergarten – 12th grade teacher, you can deduct up to $250 for materials, even if you don’t itemize your deductions. Every bit helps!

8) Student Loan Interest. You may qualify to deduct up to $2,500 of student loan interest paid by you, or even paid by your parents, in some instances. This is another deduction you can take advantage of even if you don’t itemize your deductions.

9) Jury Pay Handed To Employer. We’re generally all called upon to serve our civic duty at some point. If you’re lucky enough that your employer continues to pay your usual salary while doing so, your employer will often have you turn over your jury fees to them. That being the case, you’re still obligated to report those jury fees as taxable income on your individual income tax return. To avoid being taxed on the jury pay you didn’t actually keep, you’re able to deduct the amount that simply passed through your hands.

These are just a few of the many individual tax return deductions you may be able to take advantage of on your federal tax return. They’re helpful to keep in mind throughout the year and may be worth bringing up to your tax return preparer.