In today’s economic climate of layoffs, salary cuts, and stock market crashes, it is important to find every means of saving money possible. One way dads can help keep their family financially stable in today’s world is to make sure they are cashing in on every available tax break available. Here is a look at some tax tips to help you save money when your taxes are due.
Job Hunting Tax Breaks Including Moving Expenses
If you have found yourself unemployed like so many other dads across the country, make sure you keep track of your out of pocket costs while job hunting. Many people don’t realize that the money they spend looking for a new job is a tax deduction.
Deductible costs include printing and mailing your resume, traveling costs accrued when going on a job interview, cost of a head hunter and more. It is important to note that your costs are only deductible if you are looking for a job in your current field and your total expenses must total more than 2% of your adjusted gross income.
If you find yourself having to relocate in order to accept another job, then your moving costs are also deductible. You will have to move more than 50 miles plus the distance you drive to work from your current home in order to be able to claim the deduction.
Don’t Miss All The Deductions You Can Claim If You Have Kids
There are multiple tax deductions that you may be able to qualify for that are all related to your children. While everyone knows about the basic child tax credit you may also be eligible for:
- The student loan interest credit if you are paying the interest on your child’s student loan. You may also be eligible to claim other college related deductions like the Lifetime Learning Credit.
- Child care credit. If you are paying for daycare you may be able to claim a portion of the amount paid on your tax return.
- Adoption Credits. If you adopted a child this year you may be entitled to the adoption tax credit which in some cases will cover your entire adoption cost.
- Disabled Disability Benefits. If you have a child with a long term disability either physical or mental you may qualify for an extra deduction on your return.
Donations Equal Tax Deductions
One great way to help lower your tax bill that many dads don’t think about is charitable donations. Kids tend to outgrow things pretty quickly and you can cash in when you donate their clothing and other items to a charity. Of course you can donate your items as well. Just make sure you get a receipt and keep good documentation to back up your deductions.
Other Common Deductions You Won’t Want To Miss
There are numerous tax deductions and credits available. Here is a list of some of the most common overlooked deductions that can save you money.
- Deduction for points paid during a refinance.
- Deduction for jury pay that was paid out to your employer.
- Deduction for state taxes you paid out last spring.
- Deductions for reinvested dividends.
File Your Own Return
Finally, while many dads have relied on professional help in the past to prepare and file their tax return, most of us can save money and prepare our own return. Whatever you do, do not file your taxes late and pay a penalty! There is no excuse for that. There are many free or inexpensive options when it comes to getting help to prepare your return including using free or low cost tax preparation software.
Jeff Rose, is an Illinois Certified Financial Planner who authors the blogs Good Financial Cents and Soldier of Finance. He writes about the Roth IRA, life insurance reviews, husband to the coolest chick on the planet, In-N-Out Burger junkie and Crossfit addict.