When it comes time for taxes, we all want to be sure we’re deducting everything we can. But it’s hard to know what’s fair game—after all, there may be some deductions that you may not even realize you can claim, such as job hunting costs, energy-saving home improvements and losses from theft. Here are a few federal write-offs Chicagoans don’t want to miss come April 15.
Energy-saving home improvements.
Chicago’s got energy efficiency on the brain. Since 2013, the City of Chicago has started to report the energy use of larger city buildings. And the federal Residential Energy Efficient Property Credit rewards property owners for adding alternative energy sources to their homes. The credit allows you to write off 30 percent of the costs—this includes solar water heaters, solar electric equipment and wind turbines—through 2016.
Funds for your foster pet.
Chicago is a huge advocate of adopting and fostering pets. With nonprofits such as the Anti-Cruelty Society and PAWS Chicago, the killing rate of homeless animals has been reduced in the city by about 70 percent in the past 15 years, according toPAWS. If you decide to foster an animal from a registered nonprofit, you might be able to deduct the goods and services necessary for the pet on your federal tax return, according to a 2011 ruling by a U.S. Tax Court judge. If your expenses exceed $250, you may need a letter from the 501(c)(3) organization for your taxes.
Parking fees when visiting a client.
Living in Chicago means paying a hefty amount of parking fees. Thankfully, you may be able to deduct some of your fees. If you paid for parking while visiting a client or customer you can write these fees off on your federal taxes, according to the Internal Revenue Service. Unfortunately, you cannot deduct your parking fees at your place of business or for your daily commute.
Losses due to theft.
One in 24 Chicagoans has been a victim of property crime, according to Neighborhood Scout. The upside? If you’ve been a victim of theft, you may be eligible to claim your losses on your federal tax return, according to the IRS. If you have losses due to theft, any insurance or reimbursements that you received for the loss are not covered. To be safe, let a tax professional know and it could be something you write off.
If your employer did not pay for your move, and if your new main job is at least 50 miles farther from your former home than your old job was, you may qualify for a deduction on your federal taxes, according to the IRS. Once you’re sure you pass the distance test, you can deduct expenses incurred during your move (excluding meals).
If you work from home, you may even be able to deduct a portion of your rent on your federal tax return. Starting in 2013, the IRS offers a simpler way to determine your deduction—now it’s based on $5 per square foot of your home that you use for business (for up to 300 square feet). You can also deduct work-related items like uniforms, safety glasses, work travel and home office equipment (including Internet and office phone).
In Chicago, the unemployment rate was 8.7 percent in January, according to the Illinois Department of Employment Security. If you’re among those searching for a job in Chicago, keep track of your job-search expenses. If you’re sticking in your field with your search, you can deduct job-hunting costs as miscellaneous expenses if you itemize on your federal tax return, according to the IRS. Deductible job-search costs include travel to and from job interviews, employment agency fees and costs of printing resumes and business cards.
Hopefully, this list gets you thinking in terms of Chicago-related federal tax write-offs you may want to add to your deductions this year. Just remember, decoding taxes and tax deductions can leave your head spinning, so if you have specific questions, contact a tax professional. Good luck and get deducting.
Recommended by the Editors:
- Where to Recycle Appliances in Chicago
- Decoding Your City Dog’s Behavior
- 5 Tax-Saving Tips for Your Small Business