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 >>
Related Articles
  1. Taxes

    The Most Overlooked Tax Deductions

    The receipts you cram into your wallet could be replaced with cash come tax season.
  2. 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.
  3. Taxes

    Want A Bigger Tax Refund? Don't Itemize

    Six reasons why many taxpayers can save money and time by claiming the standard deduction.
  4. 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.
  5. Taxes

    7 Tax Terms Explained

    As the tax season begins, there are certain words you need to know. Read on to see what they are.
  6. Taxes

    How To Deduct Your Job Search Expenses

    With approximately 12 million Americans out of a job right now, many people are spending significant dollars to be noticed by potential employers. Fortunately, some of these job-search costs ...
  7. Tech

    Top Tax Tips to Deduct Investment Management Fees

    Investment expenses can be deducted by those who meet three main criteria. Here's what they are and how they work.
  8. 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.
  9. Taxes

    Calculating the Mortgage Interest Tax Deduction

    The amount of money you save by paying your mortgage off quickly will far exceed any benefit from the mortgage interest tax deduction.
  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. Schedule A

    Schedule A is a U.S. income tax form that is used by taxpayers ...
  2. Tax Deduction

    A deduction from gross income that arises due to various types ...
  3. Deduction

    Any item or expenditure subtracted from gross income to reduce ...
  4. Standard Deduction

    The IRS standard deduction is a portion of income that is not ...
  5. Above The Line Deduction

    Above the line deductions are certain types of deductions that ...
  6. IRS Publication 535 - Business Expenses

    A document published by the Internal Revenue Service (IRS) that ...
Hot Definitions
  1. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  2. Promissory Note

    A financial instrument that contains a written promise by one party to pay another party a definite sum of money either on ...
  3. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  4. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  5. Absolute Advantage

    The ability of a country, individual, company or region to produce a good or service at a lower cost per unit than the cost ...
  6. Nonce

    Nonce is a number added to a hashed block, that, when rehashed, meets the difficulty level restrictions.
Trading Center