Hidden Tax Deductions You Should Know About

ad space
The month of April is known as tax filing month. But everyone knows that the hard part comes in earlier, when the tax forms are being filled up and putting things in order are being conducted. It is during the months of March that all these usually take place.

During the period of preparing tax forms, the issue concerning tax deductions may be tackled. These deductions may help reduce the amount that a taxpayer may pay for this tax season. Aside from the common ones, there are some hidden tax deductions that most people may not know about, but would prove to be useful to those who might be qualified for them. Here are some of those hidden tax deductions.

Sales Tax Deduction On A New Vehicle

If you purchased a new car in 2010, you may be eligible for a sales tax deduction on your income tax. But you must be careful of this deduction since it may come with some restrictions and other stipulations. This deduction may only be applicable for buying a new car and not a used one. This deduction may also not be applicable for those who make $135,000 annually. The amount of the said deduction may also depend on your filing status and income.

Childcare Expenses During Volunteering

If you became a volunteer and had to hire a babysitter to take care of your kids while you are doing the said job, you might be eligible for certain deductions on your tax filing. Childcare expenses can be deducted on taxes if it was spent during the time of doing your tasks as a volunteer for a non-profit organization or for your church.

Business Meals and Entertainment

A small-business owner and even a self-employed freelancer can avail of deductions pertaining to entertainment and meals connected to meeting with prospective clients. When client meetings are conducted out of the office where expenses are required, this can be considered as deductions in terms of expenses used for entertainment and meals. You can deduct 100 percent of the cost of entertainment and 50 percent of the cost spent on meals and deduct it from your tax return. But make sure that you keep the receipts and separate them from your personal expenses.

Jury Duty Compensation

If you had spent jury duty during the year, you may be receiving some jury duty pay. Bear in mind that the money you received for jury duty is considered as income by the IRS and should be reflected on your tax return. But if you decide to return the jury duty pay because you still receive a salary from an employer, the returned amount can be used as a deduction on your tax return.