It's never too late to find ways to legitimately lower your taxes. Here are three often overlooked ways to reduce your tax burden when you're charitable or out of work.
1. Deduct volunteer miles. If you itemize your deductions, don't forget to add up the distance that you travel for charitable projects. You may be able to deduct 14 cents per mile on your taxes. This includes driving to and from any place of service, as well as any other travel expenses related to the volunteer activity or charitable purpose.
You must keep a written record of when you traveled those miles, as well as the number of miles and the name of the organization you were serving. For more information, see IRS Publication 526, Charitable Contributions.
2. Give away old items. Gather your unused household items that are in decent condition and donate them to charity. If the donation is made to an eligible organization, and you itemize your deductions, you may be able to write off the value of the belongings when you file your taxes.
Make sure you also keep good records. If the total value is more than $250, you'll need a written acknowledgement from the charity showing the worth of all donations, a description of the items and whether you received any goods or services in exchange. Again, read IRS Publication 526 for more details.
3. Keep track of job search costs. If you've been out of work, there are ways to lower your tax bill. You may be able to deduct expenses related to looking for a job if it's in the same field as your present occupation. This deduction falls under miscellaneous itemized deductions, and you can only deduct the amount that exceeds 2 percent of your adjusted gross income.
Eligible expenses could include phone calls to potential employers, travel to potential job sites, want ad placement fees, employment agency fees and resume preparation costs. IRS Publication 529 lists the specific rules for deducting these expenses from your taxes.
Create a news alert for "taxes"