10 Creative (But Legal) Tax Deductions

Cost of Commuting
Can you write off the cost of your commute? Well ... it depends.
Can you write off the cost of your commute? Well ... it depends.
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First, the bad news: If you drive miles to work every day in gridlock traffic, and then suffer through the same living hell on the way back home, the IRS won't give you a dime for your troubles. For some strange reason, you can deduct all sorts of expenses when traveling for business, but not when traveling to and from your regular place of business. But now the good news: There's a loophole.

A growing number of employers in America are participating in commuter benefit programs like the one operated by TransitChek. If your employer enrolls with TransitChek, you can opt to make pre-tax deductions from your monthly paycheck to cover commuter expenses. Those include everything from parking costs to bus passes to bicycle repairs. Since the money is withheld from your paycheck before taxes, it functions as a deduction from total taxable income.

In 2013, the maximum monthly deduction is $250 for qualified parking and $130 for public transportation [source: TransitChek]. Some commentators believe that the limit should be raised for public transportation users to encourage the use of trains, buses and van pools. Although commuter benefit programs are becoming more popular, only 6 percent of American employees participate in one [source: Bureau of Labor Statistics]. If your company doesn't offer it, go bug your human resources department.

For the next creative deduction, we'll look at unconventional medical expenses.

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