Tax Tip: The 50 Most Overlooked Deductions

AllFinancialMatters has a list of the 50 most overlooked deductions from The Ernst & Young Tax Guide 2007. Highlights of particular interest:

• Alcoholism and drug abuse treatment

• Contraceptives, if bought with a prescription

• 50% of self-employment tax

•Protective clothing required at work

That covers it on our end, which ones apply to you? —MEGHANN MARCO

50 of the Most Easily Overlooked Tax Deductions [AllFinancialMatters via Sound Money Tips]

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  1. Xkeeper says:

    Rule of Consumerist thumb: If all else fails, add a kitty.

    In seriousness, the list would be 100% more useful if they added an explanation of what each deduction is instead of just the name. It’d make it a lot less confusing.

  2. acambras says:

    Some of these expenses are covered under flex-spending accounts like the one my employer offers. Ours covers medical and dental out-of-pocket expenses, prescription and over-the-counter drugs (yes, including BC), contacts/glasses, daycare expenses, etc. At the beginning of each year, each employee estimates the anticipated expenses for his/her family (or self) and notifies the employer/payroll. Then with each paycheck, a fraction of that amount is deducted (before taxes) and put into a FSA. The employee submits receipts for reimbursement from his/her FSA (one caveat: make sure whatever system your employer has protects your confidential medical info).

    Basically, you’re getting out of paying taxes on the money your family spends on medical, dental, & daycare expenses – but you don’t have to itemize deductions at the end of the year.

    I took advantage of this for the first time last year and it was great. In mid-October, I found out that I had a couple of hundred dollars left to spend in 2006 (use it or lose it), so I made a long-overdue optometrist appointment and got new contacts (some people stock up on OTC medication). And at the end of the year I had an all-inclusive list of my FSA-related expenses, so that I could better estimate my 2007 expenses.

    I don’t work for a big firm, so it’s worth finding out if your employer offers one. If so, this is a perfect time to sign up!

  3. synergy says:

    If it’s true about the contraceptive thing, that’s kind of funny to me considering how many people in the government seem against it. heh You should’ve be having sex! Abstinance people! :D

    But seriously, would that be a health/medical cost deduction or what the heck? Now I’m going to have to go to the bookstore and page through that tome to find out.

    So many years, so many deductions lost!

  4. ckilgore says:

    By “Cellular telephones” did they mean any cell phone or just ones that you pay for, but are used for business? I’m confused.

  5. HaxRomana says:

    *blink*

    I can deduct my shoes! *glee*

  6. How did I not know I can deduct my birth contol pills?????

  7. kenposan says:

    @ckilgore:

    It has to be for work. They have a link for more info on the page.