Tax season will be here before we know it, and it always seems to sneak up on us.
One thing to be aware of is how to lower that tax bill.
With so many new laws about stimulus checks and child tax credits, taxes may be confusing next year and what you owe or get back may be surprising.
There are plenty of tax deductions that can help you shave that bottom line of what you might owe, and ways to potentially get some of that money back.
Here are 13 deductions to help you save on your 2022 tax returns
Stimulus and work related tax credits
First, and possibly the most talked about, is the child tax credit.
Many families were able to collect the first half of that credit broken up into 6 smaller, advanced payments.
This left half of the payment remaining so it can be claimed on your 2021 tax return in 2022.
Children under age 6 can be claimed for a credit worth $3,600 and children ages 6-17 can be claimed for $3,000.
Dependents that are 18 can qualify for $500 as well as dependents ages 19-24 as long as they’re enrolled in college.
The previous credit before the American Rescue Act changed the amount was $2,000 per child.
Dependents that can be claimed for this credit include a child, stepchild, foster child, sibling, step sibling, half sibling, grandchild, niece or nephew, and adopted child.
The next major deduction to keep in mind is the recovery rebate credit.
This is for anyone that did not get the third stimulus check or only got part of it when they were entitled to the full amount.
The earned income tax credit will reduce how much in taxes are owed for working families with low to moderate income.
A lifetime learning credit can be claimed for yourself, your spouse, or your dependent who is paying for a higher education.
Income requirements to claim this credit will be released in Jan. 2022.
The saver’s credit is available to those with an IRA or 401k if you’re making contributions.
Education and family related credits
The American opportunity tax credit is available to first time college students for their first year of education.
You must not have a felony drug addiction to qualify.
The income cutoff for 2020 was $80,000 for the full credit and $90,000 for a partial credit.
The numbers have not be released for 2021 but will be in Jan.
The credit is worth up to $2,500 and refundable up to 40% of whatever remains after your tax bill is brought to $0.
The child and dependent care credit this year is worth up to $8,000 per child or $16,000 for two or more children.
You’ll need to show proof of expenses that you obtain while raising your child or dependent to get up to 50% of that credit back.
If you adopted a child this year you can claim the adoption tax credit.
This is designed to cover the cost of adoption fees, court fees, attorney fees, travel, and any other expenses you experienced in the process of adopting.
The maximum that could be claimed in 2020 was $14,300.
Day-to-day life related tax credits
If you’ve experienced medical or dental expenses that make up more than 7.5% of your AGI, you can deduct them.
This includes fees for doctors visits, dentists, specialists, mental health doctors and visits, hospital visits, nursing home care, acupuncture, substance abuse treatment, and things like glasses, contacts, wheelchairs, or other medical assistance equipment.
A residential energy credit exists for those with energy efficient homes.
If you’ve installed energy efficient windows, doors, roofs, insulation, heating systems, air-conditioning systems, water heaters, stoves, or solar powered energy items, you can claim them.
There’s a student loan interest deduction for those that paid interest on student loans.
If you made contributions to a health savings account, those dollars will not be federally taxed.
You may deduct contributions made to the account.
Finally, there’s the charitable contribution deduction, which is one of the most commonly used tax deductions.
You’ll need to itemize donations made, which can include property or money donated to qualified organizations.
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