Tax deductions you never knew existed

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Balancing Priorities

Tax deductions you never knew existed

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In the final weeks to file your 2016 taxes, it's hard to keep track of all the deductions and credits that could lower your tab — particularly those that are less straightforward (but still perfectly legal).

For example, if you let a friend crash on your couch or lost big in Las Vegas, you may be able to factor that in for what you owe to Uncle Sam.

For those who want to think outside the box, here are some of the more unusual tax deductions and credits that could decrease your taxes or increase your refund.

  • Letting your bestie crash on the couch

    If your down-on-her-luck pal has been sleeping on your sofa for the past year and earned less than $4,050 while you've been mostly supporting her (or him), then you may be able to claim the sponger — er, friend — as a dependent and deduct up to $4,050 on your federal return, even though the two of you are not related at all.

    Consider it a small token of appreciation for all of your hospitality.

    Little known tax deductions friend crashing on couch
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  • Channel your inner Michael Phelps

    Pools are not just for cannonball competitions. If you have a serious health issue such as obesity, heart disease or diabetes, and your doctor recommends swimming as a vital form of daily exercise, you may be able to deduct the cost of a new pool in the backyard as a medical expense, according to Lisa Greene-Lewis, a CPA and tax expert at TurboTax.

    Luxury home exterior with pool
    Robert Daly | Getty Images
  • Pack the kids off to summer camp

    Speaking of summer, all that bug juice and capture-the-flag can also pay off. Working parents may save more than $2,000 on their taxes just because they sent their kids to summer day camp, Greene-Lewis said.

    Thanks to the Child and Dependent Care Credit, you may receive a credit up to $1,050 of your expenses for one child under 13 and up to $2,100 for two or more children under 13.

    The same goes for mini-camps or day-care programs over winter break if you are working. But overnight camps, despite being a rite of passage for some, do not count.

    Summer camp romance, young love
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  • Prune your wardrobe

    Many people organize their closets as part of spring cleaning every year, but few think of the tax-saving opportunities.

    Donating clothing, books, toys, furniture and kitchen goods all count toward your charitable contribution as far as the Internal Revenue Service is concerned. "That stuff adds up," said Kathy Pickering, executive director of the H&R Block Tax Institute.

    In order to get the deduction come April, keep a receipt, a note of the organization's name, and the date and fair market value of all noncash goods, Pickering said.

    Source: Steve Debenport | E+ | Getty Images
  • Losing big in Las Vegas

    When it comes to gambling, more people lose big than win big. In fact, collectively, more than $142 billion was lost by gamblers in 2014 alone, according to a report by Blackjack.org, based on the most recent tax tables available from the IRS.

    You can ease some of the pain of a losing streak by offsetting the tax on gambling winnings, said Pickering.

    Since you do have to report your gambling winnings and will be taxed on the windfall, don't forget to include your losses to reduce the total liability, she said.

    SINGAPORE CASINO OPEN
    Charles Pertwee | Bloomberg | Getty Images
  • Using your car for work

    Most people don't think much about all the time they spend in their cars driving to sales calls, meetings or even OfficeMax, but those work-related miles add up.

    Not counting the commute, drivers can deduct those trips at the federal rate of 54 cents per mile for 2016.

    Approximately 60 million Americans use their cars for work-related trips, but 50 percent of them are not capturing that deduction, according to a survey by the mile-tracking app MileIQ.

    Steering wheel, driving
    Katja Kircher | Getty Images