If you moved in 2013 for a new job or to change your job location, you might be able to deduct your moving expenses. However, local moves won’t qualify you for this deductible. If it’s your first job, the new workplace must be at least 50 miles from your former residence to qualify. Other qualifications exist if you are moving to a new job.
2. Capital Loss Deduction
The stock market may have had a strong year in 2013, but that doesn’t mean everybody benefited from the bull market. If your capital losses exceeded your capital gains, you can claim a capital loss deduction of your total net loss up to $3,000, reducing your income dollar-for-dollar.
3. Medical, Dental Expense Deductions
Tax-deductible medical expenses have changed as a result of the Affordable Care Act. Now, your unreimbursed medical expenses must exceed 10 percent of your adjusted gross income to qualify for a deduction. This is up from 7.5 percent in the 2012 tax year.
The 7.5 percent threshold still applies, however, for people aged 65 and older until the end of 2016. Typical expense include but are not limited to, equipment costs, medical supplies, medical and dental bills and medical devices.
4. Health Savings Account
If you have a high deductible health plan, you might be able to set up a health savings account by April 15th and contribute up to $3,250 if you’re single and $6,450 for families. Contributions to the HSA will lower your taxable income dollar-for-dollar. Additionally, contributions, earnings and withdrawals are tax-free when used to pay for qualified medical expenses.
5. SEP IRA
If you’re a sole proprietor, business owner, or earn self-employment income, you also have until April 15th to set up and contribute to a SEP IRA for the 2013 tax year. You can contribute up to 25 percent of your compensation – or 20 percent of self-employment income – up to $51,000 in this account.
Like a traditional IRA, if the SEP-IRA contribution is made prior to the filing due date of your return, it is deductible on your 2013 tax return.
6. Home-Office Deduction
There’s a new and much simpler option for claiming a deduction for a home office. Your deduction is based on the size of your home office, using a simple calculation. Simply deduct $5 for every square foot of work space used, up to a maximum amount of 300 square feet. The maximum deduction is $1,500.
7. Health Insurance Premium Deductions for Self-Employed
Business owners and self-employed taxpayers may be able to deduct health insurance premiums, so long as they aren’t covered under their employer’s or spouse’s employer’s plan.
8. Business-Expense Tax Deduction
If you’re a contractor, sole proprietor or self-employed, you may be able to deduct qualified business expenses related to your work. If you’re expending money that is not reimbursed by the partnership, you can take those business expenses directly against your partnership income.
The IRS has a firm definition regarding eligible business expenses. They must be ordinary – something common and relevant to that particular business. They must also be necessary (a proven asset or benefit to the company). However, keep in mind that business expense deductions can only be taken once, either on your individual income-tax return or separate business tax return. But not on both.