Income tax write offs are some of the best ways to lower your tax bill for 2015. Many of the following income tax write offs may apply to you, so don’t miss them when you file your 2015 income taxes. Because these tax write offs can only be applied if you itemize your deductions, you should calculate what your tax write offs will be before it is time to file.
IRA Contributions
Your contributions to an IRA are tax deductible for the year that the contributions are made. If you’re under age 50, the annual contribution limit is $5,500 across all of your Roth and traditional IRAs, even if held at multiple companies. If you’re age 50 or older, the annual contribution limit is $6,500. It is important to remember that you can never contribute more than you’ve earned in the year.
State And Local Taxes
State and local income and property taxes prepaid before the end of the year can be included in the deductions for your 2015 federal income tax bill. However, taking this approach means the payments cannot be included in your deductions for the following year. Also, tax write offs for state and local taxes are completely disallowed under the alternative minimum tax (AMT) rules for this year.
Charitable Donations
Donations to IRS-approved charities are deductible from your 2015 income taxes if made before the end of the year. Acceptable charitable donations include cash donations (even if made by credit card), and donations of materials or products, like clothing, cars, and furniture.
Vitamins And Nutritional Supplements
Specific supplements and vitamins prescribed by a doctor for the treatment of a specific condition also may qualify as tax write offs. Vitamins and supplements used to maintain general health do not qualify.
Medical-related Travel Expenses
Transportation to and from medical appointments may also be deductible when you file your income taxes. For the 2014 tax year, medical transportation mileage was deductible at the rate of 23.5 cents per mile.
Medical-related Lodging Expenses
The cost of overnight trips that are required for medical services is allowed as tax write offs in certain situations. This includes lodging expenses for caregivers if the caregiver is required to travel with the person receiving the medical services.
Medical Items
The cost of many medical-related items that are paid for out of pocket can also be deducted from your taxes, but devices that were paid for by insurance companies do not qualify. Some commonly overlooked medical items for tax write offs include prescription glasses, prescription contact lenses, hearing aids, bandages, dentures, and wheelchairs.
Medical And Dental Expenses
Medical costs and dental expenses that exceed 10 percent of a taxpayer’s adjusted gross income (7.5 percent for seniors) are tax deductible. According to guidelines from the IRS, medical expenses include medical insurance premiums, the cost of qualified long-term care services, and long-term care insurance contracts, along with the normal expenses that come from medical bills.