‘Tis the time of year when many Americans look for as many ways as possible to prevent Uncle Sam from taking their money. That includes finding deductions, large and small, to lower their taxable income and the overall amount they owe to the federal government.
Three in 10 Americans itemized their deductions in 2013 — the most recent data available from the Internal Revenue Service — which allowed them to claim tax breaks for items such as charitable donations and mortgage interest. But the tax code includes many smaller and overlooked expenses that can be filed as medical, business, employee or miscellaneous deductions. These can add up, if they meet all the requirements from the IRS.
To be on the safe side, make sure to keep all documentation to support your deduction claims. If your deduction is denied and you can’t provide any supporting documents or precedent, you could be liable for back taxes, interest and penalties.