Did you know that you are eligible for tax deductions if you take care of stray cats? You can also get a tax break as you travel in search of another job or when you purchase contact lenses. In a tough economy, it is important to maximize your net disposable income. Here are five unexpected ways to save a few dollars through tax deductions.
|Taking care of stray animals|
This summer, a court ruled that expenses a California woman made under $250 for taking care of feral cats were tax deductible. Jan Van Dusen did not have a letter from a charity saying that the purchases she made were for their benefit, which is what disqualified those that were more than $250. Nicknamed "the cat lady," ABC News' Lyneka Little reported that Van Dusen originally tried to claim over $12,000 in care for the cats she nurtured.
Moral of the story: if you're caring for stray cats, keep your receipts, and ask the shelter you're working with to write a letter, stating how your spending advances their work.
|Job-hunting costs like cab fares, food, lodging and transportation|
According to Bankrate, tax deductible job-hunting costs include, "Employment and outplacement agency fees, resume services, printing and mailing costs of search letters, want-ad placement fees, telephone calls and travel expenses."
Even though this list seems exhaustive, there are some limitations to keep in mind. First, this law only applies if you are looking for a new job in the same field. If you are an ex-lawyer looking to relocate to Los Angeles to live your childhood film producer dreams, you are out of luck! Also, these benefits don't apply to recent graduates who have never yet contributed to the internal revenue pie.
This law is stern and you must remember to show receipts as well a detailed log of your travels. The IRS is scrupulous about making sure that you are actively searching for a job, not just vacationing with friends and family while dropping off resumes.
|Moving costs for your first job|
IRS Topic 455 states, "If you moved due to a change in your job or business location, or because you started a new job or business, you may be able to deduct your reasonable moving expenses but not any expenses for meals." This IRS status specifies that to qualify for this deduction, "your new workplace must be at least 50 miles farther from your old home than your old job location was from your old home," and, "if you are an employee, you must work full-time for at least 39 weeks during the first 12 months immediately following your arrival in the general area of your new job location."
Special rules also apply to international and military moves. Also, recent graduates are not yet eligible for this tax break.
|Home improvements that save energy|
You could get up to 100 percent tax credit on certain garden variety energy saving home improvements for your primary residence. Although the cap on this break is $500, it is not contingent on your income.
Even though this tax credit seems lucrative, it has drastically been cut since 2010. The cap used to be $1,500 but was amended since Obama extended the Bush-era tax cuts.
Contact lenses are tax deductible but, "very few taxpayers get to deduct them because you get to deduct such costs only to the extent that unreimbursed expenses exceed 7.5 percent of your Adjusted Gross Income (AGI)." This means that if your AGI is $50,000, for example, you would have to spend over $3,750 in doctor fees to qualify for this exemption.
These contact lenses must be for medical reasons. Colored lenses to get a majestic glare, made famous by Edward from Twilight, are taxable. But, according an IRS publication, "You can also include the cost of equipment and materials required for using contact lenses, such as saline solution and enzyme cleaner."