Tax deductions

5 often overlooked tax deductions and credits (video)

Only 1 out of 5 declarants claim an unknown tax credit called Crédit d’Epargne (Credit for Contributions to Retirement Savings). There are others too.

5 Often Overlooked Tax Deductions

  1. Earned income tax credit
  2. Savings loan
  3. Caring for a friend or relative
  4. Camp or sports camp
  5. Education expenditure

Chart: Tax Tip of the Day: 5 Often Overlooked Tax Deductions

Watch the video above, Lisa Greene-Lewis, CPA and TurboTax expert, explains the 5 most overlooked deductions above. Plus, it details 5 additional tax deductions and credits that filers often overlook!

Our TurboTax Live experts are watching over you. An expert helps you: get help as you go or submit your taxes. You can talk live to tax experts online for unlimited answers and advice OR have a dedicated tax expert do your taxes for you, so you can have confidence in your tax return. Enjoy up to $20 extra off when you start with TurboTax Live.

Recommended Reading: The 10 Most Overlooked Tax Deductions

Video transcript:

Tracy Byrnes: Alright, you prepare your tax return. It’s the time of year. There are so many overlooked deductions and tax credits that people overlook. We don’t want you to. CPA and TurboTax expert Lisa Greene-Lewis is here with us right now to get you started and give you a top 10 list to remember. The first is the earned income tax credit.

Lisa Greene-Lewis: Yes. The first, many people forget. The IRS reports every year that one in five people default on this credit, and that’s a huge credit. It can be worth over $6,000 for a family with three children.

Tracy Byrnes: The credit of the saver, many people do not know it.

Lisa Greene-Lewis: Savings credit is another. The IRS reports that one in five people miss it. And it’s a little-known credit that you get simply for investing in your retirement. And so that credit can be worth up to $1,000 if you’re single, and up to $2,000 married, filing jointly.

Tracy Byrnes: Caring for a friend or relative is interesting because so many people think you only get a dependent credit if you have a child, but that’s not true.

Lisa Greene-Lewis: Right. So many people miss this one. If you are taking care of a friend. They crashed on your couch and you’ve been supporting them all year, you might be able to get a credit of up to $500 for it.

Tracy Byrnes: It’s something. I would take it. Camp or sports camp for your kids can be a deduction, right?

Lisa Greene-Lewis:: Yes, it’s actually a credit. People have heard of the Child and Dependent Credit for sending your kids to daycare. But also, if you send your children to summer camp or sports camp to work, you can get this credit. And as part of the US bailout, the credit for children and dependents has been expanded. And it’s up to $8,000 if you have two or more children.

Tracy Byrnes: Take those credits. Education expenses are getting really funky for people.

Lisa Greene-Lewis: Yes, so there are tuition fees. If you have a student, or even for yourself, you may be able to take college credits. You can take advantage of the US Opportunity Tax Credit for the first four years of college. And that’s up to $2,500, or the lifetime learning credit, and that’s up to $2,000. And you don’t need to get a degree for that one. You can take only one course.

Tracy Byrnes: Yeah, I think a lot of people leave them on the table. Medical expenses, such as PPE, are interesting because generally medical expenses are difficult to find.

Lisa Greene-Lewis: Yes, so I just want to remind people that there are new medical expenses you can take. And that falls under the category of PPE, so personal protective equipment, like hand sanitizer, masks. If you can itemize your deductions and claim medical expenses, you will be able to take those expenses for this equipment.

Tracy Byrnes:: Sales and local taxes, previous state taxes paid, those are super important. But let’s talk about mileage and car costs, because it increases every year.

Lisa Greene-Lewis: Yes, so the mileage, if you are self-employed, for the 2021 tax year is $0.56 per mile. And you can also deduct the mileage to get to a doctor’s appointment. So you should keep them in mind and make sure to follow them.

Tracy Byrnes: Well, even a charity event too. And what about unpaid loans to someone? It’s interesting, and I’m sure people forget it.

Lisa Greene-Lewis: Yes, this is something that so many people don’t know. So if you lend someone money and you haven’t been able to get that money back, and you’ve tried to get it back, and you know you can’t get that money back, you can deduct up to $3,000 as worthless debt.

Tracy Byrnes: Okay, Lisa, this can be very confusing. How do we keep it all organized?

Lisa Greene-Lewis: Well, TurboTax will walk you through these deductions and credits so you don’t miss a thing. They will ask you simple questions about yourself and give you the deductions and tax credits you are entitled to. And then, if you want help along the way, you can connect to a TurboTax Live tax expert, or you can hand over your taxes to them entirely.

Tracy Byrnes: This stuff is really important. You don’t want to leave money on the table. Lisa Greene-Lewis, thank you for taking the time with us.

Lisa Greene-Lewis: Thank you for hosting me.

Editor’s note: Video produced by Zach Fauld of TheStreets