The first week in March is typically when I sit down with my accountant to plan my annual income taxes. This guy is a seasoned, tough-minded pro who’s seen it all. I like to tell him that he has a black belt in finance. If there’s a legal way to get every last deduction coming to me, he’ll pry it loose.

I’d hate for my readers to pay more taxes than they have to, so in today’s column, I’m sharing some of the knowledge that I’ve gained from The Tax Master.

Every year, my accountant’s mantra is the same: “Don’t cheat yourself.” In that spirit, below is the straight dope on eight commonly overlooked tax deductions. I’ve saved thousands of dollars every year, by not forgetting some of these perfectly above-board deductions.

To minimize your taxes paid, you must stay apprised of the basic tax rules. Stop letting the deductions you deserve slip through the cracks.

It’s hard to believe that while many folks love to complain about taxes, those same people may be failing to take advantage of the many legal deductions available to them. Come tax time, don’t needlessly cheat yourself.

Avoid the audit cops…

Before we dive into our eight often overlooked deductions, note this well: Maintaining tax-smart records is always a good idea. Keeping track of your deductible expenses will save you from a world of pain if the IRS audits you.

Nowhere is incomplete record keeping more deadly than in an audit because, without documentation, any of these deductions are likely to be disavowed by the IRS in an audit. That means, when applicable, you should pay by check and credit card, or insist on cash receipts. Speaking for myself, I document every last cent. Okay, let’s get started.

1) Reinvested Dividends

If you’re set up to have mutual fund dividends automatically plowed into buying more shares, don’t forget that each reinvestment boosts your tax basis in the fund. That, in turn, lowers the taxable capital gain (or increases the tax-saving loss) when you redeem shares. Neglecting to factor reinvested dividends into your basis results in double taxation of the dividends, once in the year when they were paid to you and reinvested and afterward when they’re included in the sales proceeds.

2) Job Seeking Costs

The U.S. unemployment rate now hovers at a 50-year low of 3.6%, but that figure masks “underemployment” and millions of people are still looking for work.

Read This Story: Lies, Damned Lies, and Jobs Data

You can deduct several aspects of any job hunt, including transportation expenses, food and lodging, employment agency fees, costs of printing a resume, etc.

3) Deduction of Medicare Expenses for The Self-Employed

The rise of home-based businesses is a huge but underrated trend that’s transforming the U.S. economy. Many factors are fueling this development, including the flexibility of the Internet, the emergence of new technological tools, the non-conformism of Millennials, and the corporate downsizing of Baby Boomers who aren’t ready to go out to pasture. This is the new face of retirement in America.

It all adds up to a big paradigm shift in the workplace. People who run their own businesses after qualifying for Medicare can deduct the premiums they pay for Medicare Part B and Medicare Part D, in addition to the expense of supplemental Medicare policies or the cost of a Medicare Advantage plan.

4) Child-Care Credit

Tax time makes you want to hug your kids.

You can qualify for a tax credit worth 20% of what you pay for childcare while you work. A “credit” is considerably more beneficial than a deduction because it lowers your tax bill dollar for dollar. Ignoring this credit, which millions of two-income families can use, is even worse than missing a deduction that simply lowers the amount of income that’s subject to tax.

5) Refinancing Points

When you purchase a house, you can deduct the points paid to obtain your mortgage. When you refinance, you must deduct the points on the new loan over the life of the loan. Consequently, you can deduct 1/30th of the points a year if it’s a 30-year mortgage.

6) Airline Baggage Fees

Yep, you read right: this is your chance for revenge against airlines that are socking you with ever-rising fees. If you’re self-employed and traveling on business, add those darned fees to your deductible travel expenses.

7) State Sales and Income Taxes

Many filers neglect to include state sales and income taxes paid as deductions. If you live in a state without an income tax, adding up all the tax you’ve paid on personal and household items can save you a lot of money.

8) Medical Deductions

In 2019, the IRS allows all taxpayers to deduct the total qualified unreimbursed medical care expenses for the year that exceeds 7.5% of their adjusted gross income (AGI). Beginning in 2020, the threshold amount increases to 10% of AGI.

The following are frequently overlooked deductions related to health care:

• Medical transportation costs including tolls, parking, and mileage for trips to hospitals, physician offices, laboratories, etc.
• Medical care expenses in a nursing home setting.
• Medical equipment and accessories such as crutches, canes, wheelchairs, and orthopedic shoes.
• Hearing aids, eye glasses, and contact lenses.
• Hospital fees for services such as physical therapy, laboratory tests, MRIs, and x-rays.

Any medical expenses for which you are reimbursed, such as by your insurance or employer, cannot be deducted.

Editor’s Note: In addition to tax guidance, do you seek guidance on wealth-building? Turn to my colleague, Jimmy Butts.

Jimmy Butts is chief investment strategist of the premium trading service Top Stock Advisor. He’s skilled at pinpointing hidden gems that possess intrinsic merits. Jimmy knows how to find money-making opportunities, even during periods of extreme uncertainty as we’re experiencing now.

The stocks Jimmy finds are usually ignored by the investment herd but they eventually go on to beat the market, regardless of the crisis du jour. For his latest under-the-radar plays, click here now.

John Persinos is the editorial director of Investing Daily. Questions or comments? Send him an email: mailbag@investingdaily.com