THINGS YOU MIGHT NOT KNOW
American Opportunity Tax Credit is a credit for qualified education expenses paid for an eligible student for the first four years of higher education.You can get a maximum annual credit of $2,500 per eligible student. If the credit brings the amount of tax you owe to zero, you can have 40 percent of any remaining amount of the credit (up to $1,000) refunded to you. You must be pursuing a degree or other recognized education credential, be enrolled at least half time for at least one academic period at the beginning of the tax year, not have finished the first four years of higher education at the beginning of the tax year, not have claimed the AOTC or the former Hope credit for more than four tax years, and not have a felony drug conviction at the end of the tax year.
You have the option of deducting sales taxes or state taxes off your federal income tax.
If you’re self-employed and responsible for your own health insurance coverage, you can deduct 100 percent of your premium cost. That gets taken off your adjusted gross income rather than as an itemized deduction.
For Teachers, the IRS allows qualified K-12 educators to deduct up to $250 for materials.
You might be able to deduct the cost of a babysitter if you’re paying her to watch the kids while you volunteer to work for no pay for a recognized charity.
The Lifetime Learning credit can provide up to $2,000 per year, taking off 20 percent of the first $10,000 you spend for education after high school in an effort to give you new or improved job skills.
If something is used to benefit your business and you can document the reasons for it, you generally can deduct it off your business income.
For self-employment, you have to pay 15.3 percent of your income for social security taxes. But you do get to deduct the 7.65 percent employer portion off your income taxes.
The IRS allows you to deduct only 50 percent of the cost of business-related entertainment.
If you work at more than one workplace per day, you can deduct the costs of traveling from one location to the other, or the costs of traveling to off-site meetings.
Donations to political parties aren’t tax deductible.
You can deduct student-loan interest only if you are legally required to repay the debt. But if parents pay back a child's student loans, the IRS treats the transactions as if the money were given to the child, who then paid the debt. So as long as the child is no longer claimed as a dependent, he or she can deduct up to $2,500 of student-loan interest paid by Mom and Dad each year.
Members of the National Guard or military reserve may write off the cost of travel to drills or meetings. To qualify, you must travel more than 100 miles from home and be away from home overnight.
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