With time running out to file your 2013 tax return, you want to make sure you're on top of the available deductions to maximize your tax savings.
Taxpayers may be aware of numerous tax breaks, but depending on your income, many deductions may no longer be as valuable—or you may be ineligible entirely.
Due to recent tax-law changes, anyone with an adjusted gross income above $250,000—for a married couple filing jointly, it's $300,000—will face a limit on itemized deductions that could thus limit their potential tax savings for the 2013 tax year. In addition, many upper-middle-income taxpayers who face the Alternative Minimum Tax—a higher tax than their regular income tax—will not be able to claim deductions that may be allowed on a regular tax return, according to tax analyst Mark Luscombe of CCH, part of Wolters Kluwer.
Still, there are money-saving tax deductions and other strategies that you may be able to take advantage of, no matter how much you make. Here are eight ways to save:
1. Moving-expense deduction. If you moved to take a new job due to a change in your job or business location—and paid for the move out of pocket—you may be able to deduct your moving expenses.
"Local moves don't apply. If you just moved to the other side of town, you won't be eligible" for this tax break, Luscombe said. If it's your first job, your new workplace must be at least 50 miles away from your old home to qualify. Other time and distance tests are required if you are moving to a new job.
2. Capital loss deduction. The stock market had a very strong year in 2013, but some of your investments may not have fared as well. If your capital losses were more than your capital gains, you can claim a capital loss deduction of your total net loss up to $3,000, reducing your income dollar-for-dollar.
3. Medical, dental expense deductions. Guidelines for tax-deductible medical expenses changed because of the Affordable Care Act. Your unreimbursed medical expenses must exceed 10 percent of your adjusted gross income to qualify for a deduction. That's up from 7.5 percent in the 2012 tax year.
However, the lower 7.5 percent threshold still applies for people age 65 and older until the end of 2016. Typical expenses may include unreimbursed medical and dental bills, equipment costs and medical supplies and devices.
4. Health savings account. If you're covered by a high-deductible health plan, you may be able to set up a health savings account by April 15 and contribute up to $3,250 if you're single and $6,450 for families to the account. Contributions to the HSA will lower your taxable income dollar-for-dollar. Plus, contributions, earnings and withdrawals are tax-free when used to pay for qualified medical expenses.