Things You Didn’t Realize You Can Claim on Your Taxes

Aside from being too high, taxes are also too complex — more complex, in fact, than the tax codes of other countries. It takes most people an average of 13 hours to prepare their tax returns each year, and even so, the IRS reports 17 million errors each year. It’s no wonder people have to rely on tax preparation software or an expensive accountant to do their taxes. Worst of all, the complexity of our tax system means we’re bound to miss out on opportunities to save money. With tax season just around the corner, you just might be able to shave a bit off yours in some surprising ways. 
No, you can’t submit your pet’s veterinary or food bills, but if your animal is a service animal or emotional support animal, you can claim them on your taxes. If you have a dog that you use as a guard dog or a cat used to keep mice out of your house, you can claim them as a business expense.

It’s kind of mind-bending, but you can claim taxes you’ve paid on your federal taxes. If you’ve heard of the state and local tax (SALT) deduction, you might know that you can claim taxes paid to state or local governments. If you made a big purchase and got walloped with a huge sales tax on it, this might be your move.

If you’re self-employed and paying for your own health insurance, you can deduct 100% of your health insurance premiums, which can reduce the amount of federal tax you owe.

Did you sell your house last year? You probably know that you can exclude $250,000 of the sale price from your income, but you can also reduce the taxable income from the sale with most of the costs incurred by the act of selling the house, including commissions paid to real estate agents, legal fees, bank and escrow fees, advertising costs, home staging, and repairs and renovations.

The idea of getting something back for your gambling losses seems to go against the idea of what gambling is, but there you have it: If you’re a “casual gambler” (i.e., you don’t make a living from gambling), just as you have to declare your winnings as income, you can claim your losses on your taxes. The main thing to keep in mind is that you can only claim losses up to the amount of your winnings (so if you won $50,000 last year but lost $75,000, you can only claim $50,000 worth of losses) — and you have to have receipts.

You don’t have to be a business to claim a bad debt on your taxes. If you loaned money or paid for a service you didn’t receive, you can claim the loss on your taxes as a nonbusiness bad debt reduction. You have to be able to prove the debt, prove you made good faith attempts to collect, and provide a detailed description. If it’s money you lent to someone, you’ll also have to convince the IRS that it was a loan and not simply a gift you’ve come to regret — and gifts aren’t tax deductible. That usually means interest is charged, or that you have a document laying out the terms of the loan.