“Renters are screwed when it comes to tax deductions,” according to one tax professional, who asked to remain anonymous.
“They don’t have a mortgage and they don’t pay property taxes.” Two tax write-offs that frequently save homeowners thousands of dollars.
Renters in apartments in Ridgeland, SC should, however, take solace in the fact that renting is sometimes better than buying and the tax advantages don’t always make buying the better option.”
Depending on which state you live in and what you do for a living, you may still be able to net some substantial write offs as a renter. Here are 6 areas you may be able to uncover hidden deductions before the 4/15 deadline rolls around.
Home Office Deductions
If you have a home office that is used exclusively for business, you can allocate a percentage of your rent, utilities, renter’s insurance and other expenses as a tax deduction.
The area in your rental you write off must be used only for conducting business (no claiming the kitchen or living room areas).
The deduction is calculated by taking the percentage of square footage for the office from the entire rental square footage. That percentage of the rent can then be deducted. The same formula can be applied for the costs of heating and utilities for that percentage.
If you are self employed you can write off automobile expenses. You have the choice of deducting expenses either using the standard mileage rate of 56 cents per mile for 2014, plus business tolls and parking or the actual method. Try both methods for maximizing your deduction.
Start Up Costs
If you started a business in 2014, don’t forget about costs you incurred before 2014 that may be deductible now. Even if it’s a side business and you are showing a loss, you can use the loss as a write off, in addition to the expenses incurred.
If you are currently in a college program, including graduate school, you may be able to get a credit for:
- Tuition expenses
- Course-related books
- Supplies and equipment
- Nonacademic fees such as student activity fees
- Room and board
If you’ve already graduated and are paying back student loans you may be eligible for a student loan interest deduction.
#5 Job Hunting Costs
If you looked for a new job in 2014, you may be able to get an income tax deduction for your job-search related costs. Qualifying expenses are deductible even if they do not result in a new job being offered or accepted. These costs include:
- The cost of resumes and postage
- Job counseling
- Employment agency fees
- Telephone charges
- Local as well as out-of-town travel for interviews, to the extent not reimbursed by prospective employer
- To be deductible, you must be looking for employment in the same trade or business which you are engaged. Job hunting expenses incurred in seeking employment for the first time are not deductible.
- Deductible expenses are claimed as miscellaneous itemized deductions. These type of expenses are deductible only to the extent that, in the aggregate, they exceed 2% of your adjusted gross income.
- Sorry, but clothing expenses are not deductible, so think twice before you buy that pinstriped Armani suit.
#6 Charitable Giving
Did you do good in 2014? Did you know you can deduct the following:
- Miles you travel on behalf of a charity at 14 cents per mile.
- Expenses you paid on behalf of a charity.
- Value clothing and household goods at the lower of cost or fair market value with proper documentation.