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3 Expenses You Might Think You Can Deduct on Your Taxes — but Can’t – The Motley Fool

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Don’t claim bogus deductions. It could get you into trouble.</…….

Image source: Getty Images

Don’t claim bogus deductions. It could get you into trouble.


Key points

  • Deductions exempt a portion of your income from taxes.
  • While there are plenty of legitimate deductions you can claim, here are a few to be careful with, including commuting costs.

No matter how much money you earn, your goal should be to legally pay the IRS as little money in taxes as possible. And to achieve that goal, it’s important to be savvy about claiming the right deductions.

There’s a host of deductions you may be entitled to claim on your tax return. If you own a home, for example, you can commonly deduct interest on your mortgage if you itemize, and you may be able to deduct some or all of your property taxes. You can also deduct qualified medical expenses that exceed a certain amount of your adjusted gross income.

But it’s important to know what tax deductions you are and aren’t entitled to. Claiming the wrong ones could make it so your tax return gets audited, and that’s not a situation you want. Here are three deductions you might think you can claim — when you actually can’t.

1. Donations to individual fundraisers

Sites like GoFundMe make it easy to set up fundraisers to benefit individuals who need help. And to be clear, it’s a great thing to support those fundraisers when the cause is meaningful to you and you can swing it financially.

But one thing you should know is that you can only deduct donations to a registered charity on your taxes. If you donate to a neighborhood child’s medical fund, you won’t be able to write off that sum because that child is an individual, not a registered charity.

Similarly, you might donate to your neighbor’s kid’s soccer team fundraiser, and that’s a nice thing to do. But if that soccer team is not a registered charity, then you can’t deduct your contribution on your tax return.

2. Commuting costs to your job

If you work as a salaried employee, it’s on you to absorb the cost of getting to and from the office. As such, you cannot take a deduction for commuting expenses on your taxes.

Things are different, though, if you’re self-employed. In that case, if you incur travel expenses to visit clients or perform your work, you are</…….

Source: https://www.fool.com/the-ascent/taxes/articles/3-expenses-you-might-think-you-can-deduct-on-your-taxes-but-cant/

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