10 Tax Deductions You Don’t Want To Forget
Tax season has officially begun and let’s not kid ourselves: taxes are complicated and not the most fun thing to do. However, when we try to take a shortcut when it comes to taxes, we often shortchange ourselves out of deductions we could have taken. Taking a little extra time to research and learn about which deductions you qualify for could help you save thousands of dollars on your tax bill. Doesn’t that seem like a quality use of your time?
Here are 10 tax deductions you don’t want to forget. Make sure to read through to discover the tax credit that 25 percent of eligible taxpayers fail to claim!
1. State Sales Tax
If you live in a state with an income tax, you can either choose to take the deduction or itemize your state taxes. However, don’t forget to check to see if itemizing your state taxes may be more beneficial for you, especially if you purchased something large like a boat, car or airplane. Check out the IRS sales tax calculator to figure out your correct deduction.
2. Reinvested Dividends
Don’t pay more than you have to on reinvested dividends! Most investors usually automatically reinvest their dividends. Those reinvested dividends in turn increase your tax basis in your fund and as a result decrease the amount of taxable profit.
Make sure to use a calculator to figure out your true cost basis (the amount of gain or loss when you sell an asset) so that you’re not paying more than you have to on your investments.