5 of the Most Overlooked Tax Benefits

Date post:	02-Dec-2014
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Of course you want to take advantage of every legitimate tax benefit you possibly can. Here are five that are often overlooked. See the Year-end tax guide for more guidance. http://gt-us.co/1wbhQiS

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Content in this publication is not intended to answer specific questions or suggest suitability of action in a particular case. For additional information on the issues discussed, consult a Grant Thornton LLP client service partner or another qualified professional. © 2014 Grant Thornton LLP | All rights reserved | U.S. member firm of Grant Thornton International Ltd STUDENT LOAN INTEREST YOUR PARENTS PAID If your parents repaid your student loan, you can still take the deduction. The IRS will allow you to treat the student loan payments as if your parents had given you the money and you repaid the loan yourself. If you’re not a dependent, you can qualify for a deduction on student loan interest of up to $2,500. ELECTION TO DEDUCT STATE AND LOCAL SALES TAXES If you itemize deductions, you can elect to deduct state and local sales tax instead of state income taxes. This is valuable if you live in a state without income tax, but can also provide a bigger deduction in other states if you made big purchases subject to sales tax (like a car, a boat or a home, or all three). JOB SEARCH EXPENSES If you itemize deductions, you can deduct job search expenses like employment agency fees, travel, and preparation and mailing of portfolios or résumés. Your search must be within your current occupation, and you can deduct these expenses only to the extent your total miscellaneous itemized deductions exceed 2% of your adjusted gross income. 1 HOME OFFICE DEDUCTION You can deduct some of the cost of your home if you use your home as your principal place of business, you meet clients and customers there in the normal course of business, or your home office is a separate structure, unattached to your home. 2 3 ANNUAL GIFT TAX EXCLUSION You can give up to $14,000 to as many people as you want every year free of gift or estate tax. If you combine gifts with a spouse, that’s up to $28,000 per beneficiary per year. 4 5 Read the 2014 Year-end tax guide for more on tax benefits and deductions. 5 OF THE MOST overlooked tax benefits University

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Page 1: 5 of the Most Overlooked Tax Benefits

STUDENT LOAN INTEREST YOUR PARENTS PAIDIf your parents repaid your student loan, you can still take the deduction. The IRS will allow you to treat the student loan payments as if your parents had given you the money and you repaid the loan yourself. If you’re not a dependent, you can qualify for a deduction on student loan interest of up to $2,500.

ELECTION TO DEDUCT STATE AND LOCAL SALES TAXESIf you itemize deductions, you can elect to deduct state and local sales tax instead of state income taxes. This is valuable if you live in a state without income tax, but can also provide a bigger deduction in other states if you made big purchases subject to sales tax (like a car, a boat or a home, or all three).

JOB SEARCH EXPENSES If you itemize deductions, you can deduct job search expenses like employment agency fees, travel, and preparation and mailing of portfolios or résumés. Your search must be within your current occupation, and you can deduct these expenses only to the extent your total miscellaneous itemized deductions exceed 2% of your adjusted gross income.

HOME OFFICE DEDUCTION You can deduct some of the cost of your home if you use your home as your principal place of business, you meet clients and customers there in the normal course of business, or your home office is a separate structure, unattached to your home.

3ANNUAL GIFT TAX EXCLUSIONYou can give up to $14,000 to as many people as you want every year free of gift or estate tax. If you combine gifts with a spouse, that’s up to $28,000 per beneficiary per year.

Read the 2014 Year-end tax guide for more on tax benefits and deductions.

5 OF THE MOSToverlooked tax benefits

University