10 jobs that grant you unique tax deductions
One of the best ways to save money on taxes this year is to make sure you’re taking advantage of every possible deduction you qualify for. And depending on your occupation, you might qualify for more deductions than you originally thought.
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See if your job qualifies you for one or more of these money-saving tax deductions.
Military Personnel
Military families have many tax savings available to them, said Lisa Greene-Lewis, a certified public accountant and TurboTax expert.”They can deduct military uniforms, any military and defense-related publications purchased and moving expenses,” she said. Other tax deductions can include income gained while hospitalized during service in a combat zone, as well as combat pay for those actively serving in a combat zone and travel costs for reservists and National Guard members.
Teachers
Teachers from kindergarten to 12th grade often find that their classroom budget falls short. Greene-Lewis said they can deduct classroom materials that they purchased, up to $250, for items like unreimbursed books and writing supplies.Married couples who are both teachers can deduct up to $500 for these expenses on their joint tax return. Teachers can also deduct mileage for all business miles driven, she said.Continuing education expenses can also qualify as tax deductions for teachers. “If you take college or vocational classes, the Lifetime Learning Credit (LLC) allows you to take a tax credit of 20% of tuition and fees,” said Greene-Lewis. “The tax credit is worth up to $2,000 per tax return, and you don’t have to itemize your deductions to claim this credit.”
Construction Workers
Construction workers who are full-time employees and independent contractors are both eligible for certain tax deductions, said Priya Mishra, a tax attorney and director of operations at Top Tax Defenders.”The biggest thing both can deduct is mileage,” she said. “If you’re an employee who isn’t being reimbursed for miles driven on the job, you can deduct the mileage on your taxes. Independent contractors can deduct all work-related travel, including meetings with clients and driving to buy tools for jobs. You can also deduct the costs associated with joining any associations, journals or licensing fees you need through the year.”
Dog Walkers
If you’re working as an independent contractor, you can deduct many of the supplies needed to run your dog walking business, said tax expert LuSundra G. Everett, EA, of Everett Tax Solutions.”If the expense is considered ordinary and necessary for your field, you can deduct it,” she said. “If you are a dog walker, you can deduct the cost of leashes and treats you purchase for your clients. You can’t, however, deduct the cost of your shoes.”
Real Estate Agents
Most licensed real estate agents work as self-employed practitioners, said Micah Fraim, an independent certified public accountant in Roanoke, Virginia. “That makes them eligible to deduct business expenses for mileage driven, cell phone usage and part of the home internet bill,” he said.Mileage is reimbursed at 54 cents per mile. Cell phone and internet usage are deducted based on the percentage of time the service is used for business. For example, if the internet is used 50% of the time for business purposes, you can deduct 50% of your bill. Expenses for advertising and licensing requirements can also be deducted.
Airline Crew Members
For flight attendants and airline pilots, travel is a necessary part of the job. And as anyone who has ever traveled for vacation knows, there are many expenses that come with spending the night away from home. Fortunately, many of those expenses are deductible for airline crew members.The cost of alarm clocks, flight luggage and flashlight batteries qualify as tax deductions for flight attendants and pilots. Uniforms and the cost to dry clean them are also deductible. The portion of personal cell phone service, internet and fax lines that are used for business purposes are deductible as well.Most compelling is the per-diem deduction, which is 75% for airline crew members. This can include the cost of meals, lodging and laundry so long as they’re not reimbursed by the airline.
Insurance Agents
Work-from-home insurance agents are eligible to deduct a slew of business expenses. “Anything that’s done to further your insurance practice can be deducted,” said Fraim. That includes a 100% deduction for networking events and seminars as well as the business use percentage for cell phone and internet bills.”Insurance agents can also deduct client meals and entertainment if they’re conducted for a business purpose at 50% of the total cost,” said Fraim. Office equipment and office furniture used exclusively for business in 2022 can also be deducted when you file your tax return in 2023. The same goes for professional fees paid during the year.
Architects
Architectural or engineering services carried out within the United States can qualify for a tax deduction of up to 9% — known as the Domestic Production Activities Deduction (DPAD).”The law was passed as an incentive for people to produce things domestically rather than send work overseas,” said Fraim. “Say you earned $100,000 in profits from your domestic construction project. You’d have the potential to deduct $9,000 of income earned from domestic production. That’s a huge tax break.”
Office Clerks and Administrative Assistants
“Most office clerks and administrative assistants will receive a W-2 rather than a 1099-MISC to report income, so deductions will be a bit harder to come by,” said David Elijah, director of tax education at TaxSlayer. “However, any likely deductions would be general unreimbursed job-related expenses, i.e. costs their job has asked them to take on. This could include subscriptions to journals and publications, education courses or office supplies bought out of pocket.”Elijah added that if they are working while attending a college or trade school, an office clerk or administrative assistant could also be eligible for the LLC, or the American Opportunity Tax Credit (AOTC). Eligible students pursuing a post-secondary education can utilize this credit, allowing them a maximum annual credit of up to $2,500 for qualified education expenses, according to the IRS.
Students
Students who claim themselves as a dependent on their tax forms can take advantage of several credits and deductions.Eligible students can choose either the AOTC or the LLC. If you’re entitled to a tax return, however, only 40% of the AOTC and none of the LLC can be refunded as part of that tax return.The AOTC can be used for up to four years. There is no limit on the number of years the LLC can be applied. If married, you must file a joint return to qualify for either credit.More From GOBankingRates8 Best New Items Coming to Dollar Tree in 2023
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Jake Arky and Gabrielle Olya contributed to the reporting for this article.
This article originally appeared on GOBankingRates.com: Taxes 2023: 10 Jobs That Grant You Unique Tax Deductions
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