10 Creative (But Legal) Tax Deductions


Cost of Commuting

Female driver, traffic
If your employer offers a commuter benefit program you can make pretax deductions from your paycheck to cover travel expenses. Thanasis Zovoilis/Getty Images

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 pretax 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.

For tax year 2017 (2018), the maximum monthly deduction is $260 for qualified parking and transportation [source: TransitChek]; However, the new tax legislation has removed this incentive so you can't take it next year [source: Miller].

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