Getting every dollar back from your tax return is always the goal, but this year it might be especially important to make sure you get back every dollar possible. There are several little known tax breaks you can take advantage of if you know about them. The IRS isn’t going to come out and tell you, so this will instead.
Be sure to ask your tax specialist which of these, if any, you qualify for. If you have your taxes done for you, ask about these little known ways to get a better return. Remember this is your money, and you are entitled to getting as much of it back as you possibly can. The following is a list of some tax deductions and tax credits you might be overlooking and should inquire about:
1. Student loan interest
The Student Loan Interest deduction allows you to claim up to $2,500 from the interest paid on your student loans. If the head of the household has an AGI of less than 70,000, this can be deducted. The student loans must qualify and be from your taxable income.
2. Child and dependent tax credit
The Child and Dependent Tax credit is for expenses from dependent care while looking for a job. People out of work for Covid reasons should definitely look into this credit. You can get 20-35% of up to $3,000 for the cost of child care. Children under thirteen and a spouse who was mentally or physically unable to take care of themselves would both be qualifying dependents.
3. Charitable donations
There is a charitable donations credit this year that allows you to deduct $300. The charitable donations you can claim cannot typically exceed 60% of your Adjusted Gross Income.
4. Medical expenses
For 2021 tax returns filed, taxpayers can deduct medical expenses which were not reimbursed and cannot be more than 7.5% of their 2020 AGI. The IRS allows you to deduct preventative care, treatment, psychologists and psychiatrists, surgeries, and dental and vision care as medical expenses. Items like glasses, contacts, false teeth and hearing aids are all deductible. So are prescription medications.
5. Home office deduction
The home office deduction allows you to use part of your home being used for business purposes as a tax deduction. You may be able to deduct expenses such as mortgage interest, insurance, utilities, repairs, and depreciation for that area. You will have to figure out what percentage of your home is being used for your business, and only that portion of the residence can be counted.
This is your money. You are entitled to it, so get as much of it back as you can. The IRS has numerous ways for you to claim additional deductions, but you have to look into it. Put in some time researching what you qualify for, and get the return you deserve. In these economic times, every extra dollar is helpful. Get each one of yours.