Tax Deductions that Really Exist

Tax deductions. It’s something people are looking forward to when they have to figure how much they owe the IRS at the end of the year. There are of course the popular ones, like travel that everyone knows about. But then there are some little-known ones also.

You can deduct traveling expenses and that means any expense. You can write off mileage for trips to the bank. And one might not think it adds up if everything is in your local area. Check it out. Try and add up all of your little trips in the car and then multiply it by your allowance. According to quicktraveltrips.com that small amount of travel can add up to a $365+ deduction!

According to PE Financial Group you are not required to use the Standard Mileage method to calculate how much of a write off you are entitled to. You can also use the Actual Expense Method. This method requires you to figure out how much was spent for the car for the year and then multiply it by your “business-use percentage.” This percentage simply means, how much time is the car used for business versus how often is it used for pleasure or other personal reasons. If you have an older car that needs more maintenance and you use it for business 50% of the time, you will probably be better off using this method to calculate your deductions. The downer, you do need to keep extremely accurate records of time used.

Volunteer work does not produce any tax breaks but the travel to and from can be written off your taxes, according to bankrate.com. You can also take off for any tolls paid while driving to and from your work. Similarly, if you are required to wear a uniform for your job, the cleaning expenses can be taken off your tax bill. And for this year people traveling to help Hurricane Katrina victims can take a bigger deduction on their miles traveled than ever before. You can take up to 34¢ a mile, depending on when you drove down to help.