5 unexpected tax breaks you can claim on your tax return

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  • There are several legitimate ways to pay less taxes.
  • Tax deductions reduce your taxable income, while tax credits lower your tax bill.
  • A few of the most under-the-radar tax breaks include deductions for jury duty and bringing your pet to work (but only if they’re working, too).

There are several legitimate ways to pay less taxes.

There are hundreds of tax breaks available to Americans in the form of deductions, which reduce the amount of your income that’s taxed, and credits, which lower your overall tax bill.

When filing a federal tax return, you can either itemize deductions or claim the standard deduction, which is $12,000 for single filers, $18,000 for head of household filers, and $24,000 for married couples filing jointly.

If your itemized deductions total more than the standard deduction, it may be worth the extra time it often takes to itemize, experts say. Typical deductions filers can claim include medical expenses, charitable donations, state and local taxes (SALT), mortgage interest, and student-loan interest. Some deductions are available even if you don’t itemize.

Tax credits can be claimed whether you itemize or not; the most popular ones include the child tax credit, earned income tax credit, and the American Opportunity tax credit.

But those are just a few of the many tax breaks available to Americans. Here are a few you may not have heard of:

1. Charity work deduction

If you volunteered for a charitable organization in 2018 and drove there, you can deduct the cost of parking and toll fees and some gas (14 cents per mile), according to NerdWallet.

You can also deduct up to $250 worth of supplies you purchased for charity purposes, like food for a soup kitchen, if you kept all your receipts. If you want to deduct more than $250, it requires documentation from the charitable organization.

2. Gambling losses deduction

If a trip to Las Vegas or Atlantic City left you nearly penniless, you can recoup some of those losses come tax time. You can include gambling losses as tax deductions if you itemize, NerdWallet explained.

Money lost at a casino or racetrack qualifies, as does money spent on bingo, lottery, or raffle tickets, but only if the ticket was a loser — the amount you deduct cannot exceed the winnings you claim as income.

3. Jury duty pay deduction

If you’re summoned for jury duty, your employer may offer regular pay or paid leave to attend, and the court may pay you for your time — typically between $10 and $30 a day, according to TurboTax. In both situations, the money you receive is counted as taxable income.

However, some employers require employees to hand over their jury duty pay. If that’s the case, you must still claim the pay as part of your income, but on your tax return you can claim the pay as a deduction, resulting in a zero net gain.

4. Guard dog deduction

Believe it or not, the IRS may actually consider your pet’s medical, training, or food costs a business expense. If you bring your dog to work and can show that they’re necessary on site (maybe even protecting your business’ inventory), you may be able to deduct the cost of caring for the dog, Bankrate explained. Your chances may be better if the dog is a breed that would call for a “beware of dog” sign.

5. Retirement account savings credit

The Saver’s Credit enables low- to moderate-income taxpayers saving for retirement to reduce their tax bill by up to $1,000, or $2,000 if married and filing jointly.

To be eligible for the Saver’s Credit, you must meet three requirements: You’re at least 18 years old, not a full-time student, and aren’t claimed as a dependent on someone else’s return. Your adjusted gross income (AGI) also must be less than $31,500 if you’re a single filer, and less than $63,000 if you’re a joint filer.

Depending on your income, you can claim a credit that’s equal to 50%, 20%, or 10% of the first $2,000 in contributions to your retirement account or Achieving a Better Life Experience (ABLE) account (a tax-advantaged savings account for people with disabilities and their families).

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