FREQUENTLY MISSED PERSONAL INCOME TAX DEDUCTIONS

Paying taxes is an annual event most people don’t anticipate with glee. However, when you’re preparing taxes, be sure you know everything you can deduct.

It’s early in the new year, which means it’s time to settle up with Uncle Sam. It was reported that more than 27 million Americans did their own taxes in 2014, and that number continues to grow every year. But how do you know you’re not leaving money on the table? Here are five of the most commonly missed personal income tax deductions.

Job-hunting costs

Currently between jobs? Keep track of the expenses incurred while searching for new employment, which could be deductible if you search for a new position within the same or similar line of work as your previous employment. One caveat: job-hunting expenses related to finding your first job don’t qualify. Sorry, recent college grads.

Items you can deduct:

Transportation to and from interviews. Fees charged by employment agencies. Literature to market yourself, including resumé copies, business cards, and postage.

Child-care credit

Credits reduce your tax bill dollar for dollar, so be sure to take advantage of them! If someone else takes care of your children while you work, you may qualify for a tax credit of up to 35 percent of what you pay for their care. It’s important to note, however, that both parents must be working for the credit to apply if parents are married and filing jointly.

State tax paid last year

Did you owe your state money last year? That amount can be deducted from this year’s federal taxes. You should also remember to deduct any estimated quarterly payments you made throughout the year or state taxes withheld from your paychecks.

Social security taxes

It’s important to note that you must be selfemployed to take advantage of this deduction. But if you are, you have to pay the full 15.3 percent tax yourself. The good news is you can deduct half of what you pay in social security taxes.

Student loan interest

Paying down a student loan? Most of us know we can deduct the interest on student loan payments. But did you also know that you can deduct interest for student loan payments made on your behalf by your parents? As long as you are no longer claimed as a dependent, you can deduct up to $2,500 of the student loan interest bill footed by mom and dad.

While these are the most commonly missed deductions, there are many more the average taxpayer misses when preparing their own tax returns. It’s a great idea to use a tax-prep software that guides you through all the possible categories of income and deductions. Don’t pay more taxes than you owe.