50 of the Most Easily Overlooked Tax Deductions

November 15, 2006

Be sure and BOOKMARK this for future reference!

Last night I was looking through The Ernst & Young Tax Guide 2007. For those of you who may not be familiar with the Ernst & Young Tax Guide, it is a HUGE (over 700 pages) book that covers the federal income tax in detail. Basically, the book is IRS Publication 590 in an expanded version with lots of tips, tricks, and other cool stuff. That said, here’s a list of the fifty most easily overlooked deductions in alphabetical order (you’ll have to consult the Guide for more informaiton on each deduction):

1. Accounting fees for tax preparation services and IRS audits

2. Alcoholism and drug abuse treatment

3. Amortization of premium on taxable bonds

4. Appraisal fees for charitable donations or casualty losses

5. Appreciation on property donated to a charity

6. Casualty or theft losses

7. Cellular telephones – more on this here.

8. Cleaning and laundering services when traveling

9. Commissions and closing costs on sale of property

10. Contact lenses, eyeglasses, and hearing devices

11. Contraceptives, if bought with a prescription

12. Costs associated with looking for a new job in your present occupation, including fees for r&#233sum&#233 preparation and employment of outplacement angencies

13. Depreciation of home computers

14. Dues to labor unions

15. Education expenses to the extent required by law or your employer or needed to maintain or improve your skills

16. Employee contributions to a state disability fund

17. Employee’s moving expenses

18. Federal state tax on income with respect to a decedent

19. Fees for a safe-deposit box to hold investments (e. g., stock certificate)

20. Fees paid for childbirth preparation classes if instruction relates to obstetrical care

21. 50% of self-employment tax

22. Foreign taxes paid

23. Foster child care expenditures

24. Gambling losses to the extent of gambling winnings

25. Hospital services fees (laboratory work, therapy, nursing services, and surgery)

26. Impairment-related work expenses for a disabled individual

27. Improvements to your home

28. Investment advisory fees

29. IRA trustee’s administrative fees billed separately

30. Lead paint removal

31. Legal fees incurredin connection with obtaining or collecting alimony

32. Long-term care insurance premiums

33. Margin account interest expense

34. Medical transportation, including standard mileage deduction and lodging expenses incurred for medical reasons while away from home

35. Mortgage prepayment penalties and late fees

36. Out-of-pocket expenses relating to charitable activities, including the standard mileage deduction

37. Health insurance premiums is self-employed

38. Penalty on early withdrawal on savings

39. Personal liability insurance for wrongful acts as an employee

40. Points on a home mortgage and certain refinancings

41. Protective clothing required at work

42. Real estate taxes associated with the purchase or sale of property

43. Seller-paid points on th epurchase of a home

44. Special equipment for the disabled

45. Special schools and separately stated fees for medical care included in tuition

46. State personal property taxes on cars and boats

47. Subscriptions to professional journals

48. Theft or embezzlement losses

49. Trade or business tools with life of 1 year or less

50. Worthless stock or securities

It’s a long list. I have to admit that some of these I would have never thought of. Anyway, you might want to bookmark this for future reference.

38 responses to 50 of the Most Easily Overlooked Tax Deductions

  1. really dumb tax question….can you only deduct stuff if you itemize your taxes? so if you take the standard deduction you can’t use any of the items in this list?

  2. Mark-
    A lot of these things are itemized things, but several aren’t, like 1/2 self employment tax, childcare expenses, moving expenses, foreign taxes or capital losses. You should get a copy of the long form of the 1040 and look at it. A lot of these deductions are on the bottom half of the front side, but a few are on the back.

  3. Is it assumed that the medical expense deductions (obstetric classes, contacts, etc.) can only be deducted if the total of medical is > 7.5% of your AGI? Or can I itemize those out regardless of total medical expenses?

  4. Denise, yes, they should exceed 7/5% of your AGI–thus, medical expenses deductions rarely are able to be taken unless a horrific medical year has occurred (or an equally horrific (low income) financial one!

  5. more tax tips

  6. I’m confused by the “cell phone” tax deduction. Can you please give us a bit more information?

  7. A useful and importnat post! I’ll be checking back at tax time!


  8. Lawrence,

    I posted a follow-up to the cell phones here.

  9. I thought this was pretty cool. I have been trying to find out if there is a way I could claim the money I spend on my childrens lunches at school on taxes. I know.. sounds like a crazy question lol. But hey.. I have 3 kids youngest isnt in school yet but will be in just a couple of years. at 2 bucks a day for each child ( even with just the two older ones) it certainly adds up!!. Thanks for the info.. it definatley helps.

  10. I have a two family house and rent out the second floor. I know that I can deduct improvements to that apartment but what about improvements to my own apartment or to the rest of the house – exterior (steps, siding) or repairs to boiler, water heater?

  11. If I need to modify my home for medical reasons and get an appraiser to estimate the new value of my home, can I deduct that appraisal fee on my taxes?!?

  12. can you deduct personal travel expenses? gas & food?

  13. I recently had to relocate for a new job. In the process, I lost $40K on the sell of my home. Can I claim this as a tax deduction?

  14. If you filed bankcruptcy, can you deduct the fees you paid to do so? I sold my house and gave my ex $5,000.00 of the profit, can this be deducted on mine?

  15. The interest on your RV deductable?

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  17. Last year I paid alot of debt (student loan, judgements and back taxes) is any of this deductible?

  18. Can a person claim any vehicle repair or maitenance costs when filing long form? If so, is there a breakdown of what they are? Please advise and thanks, Patti 01.15.09

  19. What items can or cannot be claimed as over the counter medical expenses. What type proof is needed?

  20. How do I go about deducting worthless stock? I have a few of those unfortunately.

    Thank you much,


  21. I loaned $220K on an investment property. I paid taxes for 2 years on the earned interest income. The borrower filed BK and I received the property back. Re-sold the house for $190K.Can I deduct the $30K as a loss??


  22. Very useful files search engine. rapidshare-provider.com is a search engine designed to search files in various file sharing and uploading sites.

  23. Can I deduct estate tax planing exp. in the year paid to lawer?

  24. I saw a few things we should have deducted in 2007, how can I go back and claim them? How can you get a deduction for a depreciated Home Computer? It said Hospital Services – Therapy, is Chiropractor therapy included? I saw someone made a statement about receiving a deduction for lunch money for children, I never saw an answer. Can you deduct money spent on lunches for your children? Even if part of the year you had to get reduced lunches because you lost your job? Also, how can you go about getting a deduction for costs associated with looking for a new job? I had to do that for 5 months in 2008 and 3 months in 2007 that was never counted for, along with other things.

  25. thank you for this usefull information

  26. i get ripped on taxes every year i really need good advice from somebody about saving tax.

  27. Can I deduct the milage driven to and from Weight Watcher weekly meetings? I have a letter from my doctor & a diagnosis, so the monthly dues can be claimed.

  28. I heard you can write off the tax you paid on the purchase of a new vehicle, cell phone if its used for work, gas mileage due to travel for work (not to and from work but actual travel), and cell phone usage for work…can anyone confirm this? and how do you go about writing off something…Ive never done it before…just dropped off my w2’s and other forms and let them handle it..

  29. Can I deduct legal fees I’ve incurred from a child custody case?

  30. Can I deduct or itemize my child’s school lunch on my taxes?

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