It’s Tax Season, my friends, and depending on how you’ve handled your income and expenses in 2017, this could be a wonderful time of year — or it could be your most hated time of year.
I have been compiling tax returns for seven years now and I have seen all types of individuals and their returns in that time — from those making $6,000 to those making $600,000. And while everyone has their own set of circumstances, a major portion of my clients come to me after they’ve realized they made a mistake, big or small.
There are plenty of software programs out there that make some great promises, but in the end, the software is only as good and as knowledgeable as the user.
Here are some common items missed on a tax return:
- Home Office Expense Deduction- with the growing number of “work-from-home” careers out there, I have seen many clients miss the fact that a portion of your home expenses can be deducted if you have a job that requires you to work out of your house
- Home Mortgage Points and Iinsurance- these items are deductible (up to a certain amount) just as if they were interest payments
- Home Equity Loan Interest may be deductible in a lot of cases, as well.
- Student Loan Interest- if you’re paying your student loans, make sure to deduct for Adjusted Gross Income
- Education Credits- when you are attending college- undergraduate and graduate, there are several credits/deductions to take advantage of and I have seen students miss out not realizing there is more than one credit!
- State and Sales Tax- these are also deductible. And can really help boost up your itemized deductions.
Don’t forget to account for:
- State refund awarded last year – If you’ve itemized in the past, you may have to claim this as income.
- Rental properties – Even if you live there! You may need to claim the income received from the other tenants.
- Gambling Winnings – That scratch ticket you won $500 on? Yeah, you have to put that on your return.
Remember tax reform? That will affect you this year, so plan accordingly. In most cases, everyone should see a decrease in overall tax due, but unfortunately, there will be some earners who have the opposite. A coming piece will detail what the new legislation means for us common folk!
Please note: Not everyone qualifies for the deductions above, these notes are intended to be guidance and further work may need to be done to determine how and if someone is eligible.
Tina Masiello is an accounting and tax professional currently working in the internal audit function. She graduated Worcester State University with a Bachelors Degree in Business Administration in 2011 and graduated from UMass Amherst in 2015 with a Master’s Degree. Currently, Tina is working towards obtaining a mass CPA license.