As challenging as it is to keep up with all the changes in tax law from year to year, there is a good chance that you may be missing out on some worthwhile tax deductions. Here are some of the most commonly overlooked tax-deductible items that could reduce your tax burden this year.
1. State & Local Sales Tax
For most states, deducting your state income tax is a simple way to reduce your federal taxes. But since there is no state income tax in Texas, things are a bit more complicated. In these cases, federal law allows you to deduct your state sales tax, and the IRS provides a handy chart to make the process easier.
2. Student Loan Interest
If you, a spouse, or a dependent have student loans, you can deduct the amount you paid in student loan interest for the prior year, up to $2,500. This deduction is available even if you don’t itemize, making it a great way to reduce your tax burden with minimal effort.
3. Child & Dependent Care Tax Credit
When you have children 12 or under and have to pay for child care or a summer camp while you are working, you may be able to deduct a portion of those expenses from your taxes, up to $3,000 for a single child or up to $6,000 for two.
4. Medical Expenses
If you have unpaid medical expenses that exceed 7.5% of your adjusted gross income, you may be able to claim them as a tax-deductible expense. This can include not only the medical expenses, but travel costs as well, up to 20 cents per mile.
5. Charitable Donations
Giving to charity can be rewarding, but it can also earn you tax credits. You can deduct the cost of any cash, items, or supplies you donate, as well as things like travel expenses for volunteer work, up to 14 cents per mile.
6. Job Expenses
If the apparel, safety gear, and equipment that you need for your job are not covered by your employer, and exceeds 2% of your adjusted gross income, you may be able to deduct the cost of those items. This includes things like uniforms, union or association dues, safety equipment, and some tools.
7. Home Office Expenses
If you work from home or run a business and have a dedicated home office for those activities, you may be able to deduct a portion the of expenses that are shared between your home and your office. This includes things like rent, utilities, mortgage interest, depreciation, and more.
8. Retirement Savings
Known as the Saver’s Credit, the Retirement Savings Contributions Credit allows eligible filers to deduct up to $2,000 for contributions made to a retirement account, as long as your income falls below the $31,500 mark for single filers or $61,000 for married couples filing jointly.
Expert Tax Preparation Services in Dallas
Need help wading through all the tax-deductible expenses that you are eligible to claim? Talk to our team at Gurian CPA. We are tax planning and preparation experts, and we can help you to maximize your savings at tax time.
Call (469) 306-9866 today to speak with our tax professionals in the Dallas or Houston area.
