A:

Most tax preparation software does a good job. However, like any recipe, the end results are only as good as what goes into it. As such, whether you use tax preparation software or the services of a tax professional, you will want to ensure that you provide all the information and data necessary to ensure you receive all the deductions for which you are eligible.

The following are some of the deductions that are often missed:

  • Medical expenses for the taxpayer, his or her spouse, and dependents. If you itemize your deductions, you may be able to deduct medical expenses. These range from fees paid to doctors, chiropractors, psychiatrists, psychologists and Christian Science practitioners to amounts paid for participating in a smoking-cessation program (including drugs prescribed to alleviate nicotine withdrawal). The list of deductible medical expenses is very long and includes items you may not have thought would be there.

    But there are also some items that are excluded that one would think may have been included, for instance over-the-counter medicines. (To read more about deductions, see Which is better for tax deductions, itemization or a standard deduction?)

  • Moving expenses, whether you itemize or not. If you incur costs for moving because you changed your job or your job relocated, providing your move is closely related to when you start working. Certain limits apply.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /?>

  • Armed Forces reservists traveling more than 100 miles from home. If you are a member of a reserve component of the Armed Forces in the <?xml:namespace prefix = st1 /?>United States and if you travel in connection with your performance of services, you can deduct your travel expenses as an adjustment to gross income rather than as a miscellaneous itemized deduction.

Also remember that some expenses are subject to certain limits. For instance, in certain cases, you are able to deduct only the amount by which your total medical care expenses for the year exceed 7.5% of your adjusted gross income (AGI). If you use tax preparation software, it will likely perform the necessary checks and balances to ensure that you deduct only the maximum permissible amount. But to be on the safe side, you should consider having your return checked by a tax professional.

To read more frequently asked tax questions, see Common Tax Questions Answered, How do I avoid paying excess taxes on securities I have sold?, How can I make sure I'm ready to file my taxes? and How can I reduce the taxes on my inherited retirement assets?

Question answered by Denise Appleby, CISP, CRC, CRPS, CRSP, APA

RELATED FAQS
  1. Which is better for tax deductions, itemization or a standard deduction?

    Each deduction that you claim may result in a decrease in the amount of taxes that you owe. However, whether you receive ... Read Answer >>
  2. How can I make sure I'm ready to file my taxes?

    Whether you file your return yourself, or have it done by a tax professional, you want to make sure you include all your ... Read Answer >>
  3. What are some commonly missed deductions for business owners?

    If you own a business, you are eligible to deduct certain business-related expenses. These include deductions for the following: ... Read Answer >>
Related Articles
  1. Taxes

    Do Your Research Before Claiming These Deductions

    Be sure to read the fine print about any deduction or credit that you’re planning to claim.
  2. Taxes

    How To Get The Most Money Back On Your Tax Return

    These tips will help you get a larger refund this year, while teaching you how to pay less taxes going forward.
  3. Taxes

    7 Commonly Overlooked Tax Deductions

    Don't pay more taxes than you have to because you've missed taking legitimate tax deductions. Here are just a few you may have overlooked.
  4. Taxes

    10 Tax Benefits for the Self-Employed

    Running your own business has both personal and financial perks.
  5. Taxes

    7 Ways To Minimize Your 2014 Taxes By December 31

    The year's not quite over yet. See whether taking any of these steps would leave you owing less in 2014 taxes, come April.
  6. Taxes

    3 Little-Known Ways to Reduce Your Income Tax

    Looking to pay less income tax? Here are three lesser known ways to do so.
  7. Taxes

    5 Overlooked Tax Deductions for Small Businesses

    It's easy for small business owners to miss a few tax write-offs. Here's where to find them.
  8. Taxes

    Top Tax Advantages of Buying a Home

    Don't forget these deductions and credits that homeowners can use to reduce their tax bill.
  9. Taxes

    10 Money-Saving Year-End Tax Tips

    Getting organized well before the deadline will curb your frustration and your tax liability.
  10. Taxes

    5 Expenses You Want to Be Deductible But Aren't

    Here are five expenses that many taxpayers often try to claim only to find out that their deductions are denied.
RELATED TERMS
  1. Itemized Deduction

    A deduction from a taxpayer's taxable adjusted gross income that ...
  2. Deduction

    Any item or expenditure subtracted from gross income to reduce ...
  3. Tax Deduction

    A deduction from gross income that arises due to various types ...
  4. Deductible

    1. The amount you have to pay out-of-pocket for expenses before ...
  5. Tax Deductible Interest

    A borrowing expense that a taxpayer can claim on a federal or ...
  6. Above The Line Deduction

    Above the line deductions are certain types of deductions that ...
Hot Definitions
  1. Restricted Stock Unit

    Compensation offered by an employer to an employee in the form of company stock. The employee does not receive the stock ...
  2. Operating Ratio

    A ratio that shows the efficiency of a company's management by comparing operating expense to net sales. Calculated as:
  3. Expense Ratio

    A measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual ...
  4. Pro Forma

    A Latin term meaning "for the sake of form". In the investing world, it describes a method of calculating financial results ...
  5. Trumpcare

    The American Health Care Act, also known as Trumpcare and Ryancare, is the Republican proposal to replace Obamacare.
  6. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
Trading Center