Video: 5 Tax Deductions Commonly Overlooked
Tax filers often forget to file for credits and deductions they could claim. CPA and TurboTax tax expert Lisa Greene-Lewis is here for a review of what tax filers may have missed.
Video Transcript:
[MUSIC PLAYING] TRACY BYRNES: All right. You're putting your tax return together. It's that time of year. There are so many overlooked tax deductions and credits that people forget. We don't want you to. Lisa green Louis, CPA and turbotax expert, is here with us right now to start and give you a list of the top 10 that you need to remember. The first, Lisa, the earned income tax credit.
LISA GREENE-LEWIS: Yes. The first one many people forget the IRS reports every year that one in five people miss out on this credit, and it's a huge credit. It can be worth over $6,000 for a family with three kids.
TRACY BYRNES: The saver's credit, a lot of people don't know about this.
LISA GREENE-LEWIS: The saver's credit, that's another one in the IRS reports that one in five people miss it, and it's a little-known credit that you get just for making investments into your retirement. And so that credit, it can be worth up to $1,000 if you're single and up to $2,000 married, filing jointly.
TRACY BYRNES: Taking care of a friend or relative is interesting, because so many people think you only get the dependent credit if you have a kid, but that's not true.
LISA GREENE-LEWIS: Right. So many people miss out on this one. If you're taking care of a friend, they've been crashing on your couch, and you've been supporting them for the whole year, you may be able to get a credit up to $500 for that.
TRACY BYRNES: It's something. I'd take it. Camp or sports camp for your kids can be a deduction. Can't it?
LISA GREENE-LEWIS: Yes. It's actually a credit. People have heard of the child and dependent care credit, like for sending your kids to daycare. But also, if you send your kids to summer camp or sports camps, so you can work, you can get this credit. And under the American rescue plan, the child and dependent care credit was expanded, and it's up to $8,000, if you have two or more kids.
TRACY BYRNES: Take those credits. Education expenses get really funky for people.
LISA GREENE-LEWIS: Yes. So there's education expenses. If you have a college student or even for yourself, there may be education credits that you can take. You can take the American 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 have to be earning a degree for that one. You can be taking just one class.
TRACY BYRNES: Yeah. I think a lot of people leave those on the table. Medical expenses, like PPE, is interesting, because usually medical expenses are hard to come by.
LISA GREENE-LEWIS: Yeah. So I just want to remind people, there's some new medical expenses that you can take, and that's under the category of PPE. So the Personal Protective Equipment, like hand sanitizer, masks, if you can itemized deductions and claim medical expenses, you'll be able to take those expenses for that equipment.
TRACY BYRNES: Sales and local taxes, previous state taxes paid, those are super important. But talk about the mileage and car expenses, because that increases every year.
LISA GREENE-LEWIS: Yeah. So mileage, if you're self-employed for tax year 2021, it's $0.56 per mile. You can also deduct mileage for going to a doctor's appointment. So you have to keep those in mind and make sure that you track those.
TRACY BYRNES: Right, even a charitable event too. And how about unpaid loans to someone? That's interesting, and I'm sure people forget that.
LISA GREENE-LEWIS: Yes. That's something that so many people don't know. So if you loan someone money, and you haven't been successful in getting that money back. And you attempted to collect it, and you know that you're not going to be able to collect that money, you can take a deduction up to $3,000 as a worthless debt.
TRACY BYRNES: Lisa, this can be really confusing. How do we keep this all organized?
LISA GREENE-LEWIS: Well, Turbotax will guide you through these deductions and credits, so you don't leave anything out. They'll ask you the simple questions about you, and they'll give you the tax deductions and credits you're eligible for. And then if you want help along the way, you can connect to a Turbotax live tax expert, or you can fully hand your taxes off to them.
TRACY BYRNES: Stuff is really important. You don't want to leave money on the table Lisa Greene-Lewis, thanks for taking the time with us.
LISA GREENE-LEWIS: Thank you for having me. [MUSIC PLAYING]
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