Explain "Forgotten Deductions" as a Tax Reduction Technique

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The Answer is Many taxpayers assume that since there are 7.5 percent and 2 percent floors imposed on medical and miscellaneous expenses, respectively, they cannot possibly pass the threshold at which these expenses become deductible. This is usually not a good assumption. Medical expenses not only include doctor and hospital bills, but also medically required home improvements, special schooling for a handicapped child, travel for medical care, eye glasses, cosmetic surgery, and health insurance premiums. Even the difference in rental expenses, if someone is forced to move to a larger home to accommodate a live-in nurse, is deductible.
Another tax planning strategy is to group medical expenses in alternate years to make them deductible. For instance, the taxpayer may opt to have elective surgery or braces for the children all in one year, so health care expenses will be high.
Like medical deductions, miscellaneous deductions also offer valuable tax deduction strategies. For instance, cost of membership dues, financial planning and accounting fees, and un-reimbursed business expenses are examples of often overlooked deductible miscellaneous expenses.
Other itemized deductions often ignored by taxpayers involve charitable contributions and state and local income taxes. For instance, people who use their car for charity work can deduct mileage costs plus parking and tolls. Also deductible are expenses such as a scoutmaster's uniform, and phone calls and travel expenses for charity work. In the area of state income taxes, the taxpayer can count not only amounts withheld from the year's paychecks and any estimated payments made, but also any tax paid on the previous year's state tax when filed. In some states, taxpayers can write off local taxes beyond income and real estate tax. Residents of several states including California, New Jersey, New York, and Rhode Island can deduct the mandatory contributions they make to state disability funds as state income tax. Auto license fees normally are not deductible, but some states like Colorado base part of the charge on the value of the car. That part of the fee is deductible as a personal property tax.

Explain "Forgotten Deductions" as a Tax Reduction Technique

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