Tax season can be a daunting and overwhelming experience for many. With the ever-changing tax laws, it is hard to keep up with all the deductions and credits available. However, here at E&Y Tax Prepration Servies we can help! Not all deductions are created equal. To help you take full advantage of the tax system, here is a list of 10 tax deductions that you don’t want to miss this year. From medical expenses to home office deductions, this list is sure to help you maximize your tax savings and make sure that you’re not leaving any money on the table. Don’t miss out on these deductions and credits, as even the smallest ones can add up to big savings. So, don’t wait any longer and start taking advantage of all the tax deductions available to you this year!
Medical Expenses
By now, you’ve probably heard that medical expenses can be deducted from your taxable income. You can deduct your medical expenses that are more than 7.5% of your adjusted gross income (AGI). This is a significant deduction that can lower your taxes by hundreds or thousands of dollars. While medical expenses can be deducted, there are some rules that you need to follow. First, medical expenses include both out-of-pocket and insurance costs. So, even if you get health insurance through your employer, you can still deduct the cost of your doctor visits and prescription medications. Second, you can only deduct the amount you actually paid out-of-pocket. So, if your employer covers a portion of your medical expenses through their plan, you can only deduct the amount you paid. Third, you can only deduct medical expenses that were incurred during the year that you are filing taxes for.
Charitable Donations
Charitable donations have been a popular deduction for a long time, and they are still a popular deduction today. If you qualified, you can deduct the full amount of your charitable donations from your taxes. In most cases, this deduction lowers your taxable income and can result in a significant tax savings. There are two main types of charitable donations: cash donations and gifts of property. If you made cash donations, such as donating your time or services to a cause, you can deduct the full amount of your donation.
Home Office Deduction
If you use your home as a business space, you can deduct the full amount of the mortgage payments from your taxes. This is another significant tax deduction that can significantly lower your taxable income. Depending on your circumstances, you may be able to deduct the full amount of the interest payments on your home mortgage, or you may be able to deduct a smaller portion of the interest.
Student Loan Interest
If you have loans that you took out to attend college or repay student loans, now may be the time to take advantage of a tax deduction. The interest you pay on your loans, including student loans, can be deducted from your taxes. This is a significant tax deduction that can lower your taxable income and result in significant savings.
Moving Expenses
If you incur any moving expenses while relocating for a new job, these expenses can be deducted from your taxes. This is another significant tax deduction that can significantly lower your taxable income. Depending on the circumstances, you may be able to deduct the actual costs of moving or an estimate of the cost.
State and Local Tax Deductions
State and local taxes are another popular deduction that can lower your taxes significantly. You may be eligible to deduct taxes from both state and local governments. Depending on your circumstances, you may be able to deduct just state taxes or just local taxes.
Child and Dependent Care Tax Credit
Another tax deduction you don’t want to miss this year is the child and dependent care tax credit. This is another significant deduction that can significantly lower your taxes.
Self-Employment Tax Deduction
Certain professions, including self-employment, can allow you to claim a tax deduction for certain expenses. If you are self-employed and make money through your own business, you may be able to deduct some of your expenses. Retirement savings contributions made through a self-employed person can be claimed as a tax deduction.
Retirement Savings Contribution Credit
Finally, if you are making contributions to a 401(k) or other retirement plan, you may be able to claim a tax credit for your contributions. This is another significant deduction that can significantly lower your taxes.
Conclusion
While the process of filing taxes can be nerve-racking and seem like a daunting task, we at E&Y Tax Preparation Services in Bloomfield HIlls, MI can help you take full advantage of the many deductions available. By filing early and planning ahead, you can lower your taxes and make sure that you are not missing out on any deductions. So, don’t delay and start filing your taxes today! Call us at (248) 362-1313 or fill out the contact form below.
