Each year, the complexities of our tax code cause many taxpayers to leave money on the table when filing their returns. As they say, you must pay taxes but you don’t have to leave a tip.
Failing to take tax deductions you are entitled to can be costly, resulting in the loss of income that could have been applied toward other financial goals such as retirement planning, education funding or paying down debt. The commonly overlooked deductions noted below may help to minimize your tax liability this season.
Medical expenses: Differences between federal and state deductibility thresholds often lead taxpayers to overlook medical deductions. According to Marguerite L. Mount, CPA with The Mercadien Group, “When individuals think about itemized deductions they often don’t even consider the medical deduction — primarily because they have to exceed the Federal threshold limit of 7.5 percent to 10 percent (depending on income and age) of adjusted gross income, which usually means a catastrophic medical expense.