10 Common Tax Deductions You May Be Missing



Tax season can be a stressful time for many people. But it doesn't have to be. By knowing the tax deductions you're eligible for, you can save yourself a lot of money.


Here are 10 common tax deductions that you may be missing:-


1. Medical expenses

If you have paid for medical expenses for yourself, your spouse, or your dependents, you may be able to deduct them on your taxes. Medical expenses can include things like doctor's visits, prescription drugs, and hospital stays.


To qualify for the medical expense deduction, your medical expenses must exceed 7.5% of your adjusted gross income. You can also deduct medical expenses that are not reimbursed by insurance.


2. State and local taxes

You can deduct the state and local taxes you paid, including income taxes, sales taxes, and property taxes. This deduction is especially beneficial for people who live in high-tax states.


3. Mortgage interest

If you have a mortgage, you can deduct the interest you paid on your mortgage. This deduction can be very significant, especially for people who have recently purchased a home.


To qualify for the mortgage interest deduction, your mortgage must be secured by your primary residence or a second home. You must also have used the loan proceeds to purchase or improve your home.


4. Student loan interest

If you have student loans, you may be able to deduct the interest you paid on your loans. This deduction can be very helpful for recent college graduates who are struggling to pay off their loans.


To qualify for the student loan interest deduction, you must have student loans that are qualified education loans. You must also have paid interest on your loans during the tax year.


5. Charitable donations

If you made charitable donations during the tax year, you may be able to deduct them on your taxes. Charitable donations can include things like cash donations, donations of property, and volunteer time.


To qualify for the charitable donation deduction, you must have donated to a qualified charitable organization. You must also have itemized your deductions on your tax return.


6. Business expenses

If you are self-employed, you can deduct your business expenses on your taxes. Business expenses can include things like office supplies, travel expenses, and advertising costs.


To qualify for the business expense deduction, your business expenses must be ordinary and necessary for your business to operate. You must also have kept good records of your business expenses.


7. Retirement plan contributions

If you contribute to a retirement plan, such as a 401(k) or IRA, you can deduct your contributions on your taxes. This deduction can help you save money for retirement and reduce your taxable income.


To qualify for the retirement plan contribution deduction, you must have contributed to an eligible retirement plan during the tax year. You must also have met the income requirements for the plan.


8. Child tax credit

If you have children, you may be eligible for the child tax credit. This credit can be worth up to $2,000 per child.


To qualify for the child tax credit, your child must be under the age of 17 and must meet certain citizenship and residency requirements. You must also have an adjusted gross income below a certain threshold.


9. Earned income tax credit

If you are a low- to moderate-income worker, you may be eligible for the earned income tax credit (EITC). This credit can be worth up to $6,935 for taxpayers with three or more qualifying children.


To qualify for the EITC, you must meet certain income and residency requirements. You must also have at least one qualifying child.


10. American opportunity tax credit

If you are a student or are paying for the education of a child, you may be eligible for the American opportunity tax credit (AOTC). This credit can be worth up to $2,500 per student.


To qualify for the AOTC, you must meet certain income and education requirements. You must also have paid qualified education expenses during the tax year.


Conclusion

These are just 10 of the many tax deductions that you may be eligible for. By taking advantage of these deductions, you can save yourself a lot of money on your taxes.


If you are unsure whether you qualify for a particular deduction, you can speak to a tax professional. Tax preparation services can help you to identify all of the deductions you're eligible for and file your taxes correctly.

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