Tax season can be overwhelming, especially when trying to figure out which deductions you qualify for. Many taxpayers leave money on the table simply because they aren’t aware of certain deductions that can significantly reduce their taxable income. Here are some top tax deductions you might be missing:
1. State and Local Tax (SALT) Deduction
If you itemize your deductions, you can deduct state and local taxes paid, including property taxes and sales taxes. However, the SALT deduction is capped at $10,000 for individuals and married couples filing jointly. Many people overlook this deduction, thinking it’s not worth it. Lindy Parker, CPA can help you determine if itemizing is more beneficial for your situation.
2. Medical and Dental Expenses
If your medical and dental expenses exceed 7.5% of your adjusted gross income (AGI), you may be eligible to deduct the portion that exceeds this threshold. This can include costs for prescriptions, treatments, and even certain travel expenses for medical care. Navigating medical deductions can be complex, but our team at Lindy Parker, CPA can help ensure you’re maximizing this deduction.
3. Charitable Contributions
Donations to qualified charities can be deducted, including cash donations and the fair market value of donated goods. If you’re using your vehicle for charity-related travel, you may also be able to deduct mileage at the standard rate. Lindy Parker, CPA can help you track and calculate these deductions accurately.
4. Home Office Deduction
If you work from home and use part of your home exclusively for business, you might qualify for a home office deduction. This can cover a portion of your rent or mortgage interest, utilities, and other related expenses. Understanding the eligibility criteria can be tricky, but Lindy Parker, CPA can provide guidance to ensure you claim this deduction correctly.
5. Educator Expenses
If you’re a teacher, you can deduct up to $300 (or $600 if married filing jointly and both spouses are teachers) for out-of-pocket classroom expenses. This includes costs for supplies, books, and other educational materials. If you’re unsure if your expenses qualify, let Lindy Parker, CPA review your situation.
6. Student Loan Interest
If you’re paying interest on student loans, you might be able to deduct up to $2,500 of interest paid during the year. This deduction can phase out based on your income, so it’s important to check annually if you’re eligible. Our experts at Lindy Parker, CPA can help you determine if this deduction applies to you.
7. Retirement Contributions
Contributions to retirement accounts like IRAs or 401(k)s may be tax-deductible, depending on your income and the type of account. This not only helps reduce your taxable income but also supports your future financial security. Lindy Parker, CPA can guide you through the options and benefits of retirement contributions.
Don’t let potential deductions slip through your fingers! At Lindy Parker, CPA, we understand the intricacies of tax deductions and are committed to helping you maximize your tax savings. If you’re unsure about which deductions you may qualify for, reach out to us for personalized assistance tailored to your unique financial situation.
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