Americans are starting to prepare for tax season so when it’s time to file, they can save the most money. These tax deductions can help.
It’s still too early to file and the IRS FreeFile portal is not yet opened, but getting your documents together will making filing faster and easier.
Make sure you tally up all the expenses you can write off to lower what you owe and maybe even get some cash back.
Here are 8 ways to reduce your tax bill or increase your refund
Add up all of your sales tax
It’s possible to deduct sales or state income taxes from your federal income tax.
This works for states that don’t have their own income tax.
Sales tax breaks are good for larger purchases, even when you paid state taxes.
You’ll need to itemize these deductions.
You can use the sales tax calculator the IRS provides to get an idea of what you can deduct.
Deductions can be made for medical and dental care.
The catch is you can only deduct the amount that exceeds 7.5% of your total AGI.
These deductions can include diagnosis costs, treatment, prevention of disease, or treatments for structure and function of the body.
Funeral and burial expenses, over the counter medicines, toothpaste, or cosmetic surgeries may not be claimed.
Teachers often spend a lot of their own money on supplies for their classroom.
Up to $250 can be claimed for reimbursement.
If you’re a teacher married to another teacher, you can claim up to $500.
Classroom teachers can claim reimbursements for professional development courses, books, computer equipment, supplies, and materials used in the classroom.
Phys Ed teachers can claim expenses for athletic supplies.
Making charitable contributions to qualifying organizations can get you a $300 deduction.
Married couples can claim up to $600.
It is not necessary itemize charitable donations.
Child and dependent care credit
If you paid for childcare while at work, looking for work, or going to school you may claim this credit.
Expenses claimed can be up to $8,000 for one child or $16,000 for two or more.
This credit will not work for people filing separately.
Lifetime learning credit
This credit is available for tuition and college expenses.
Undergraduate, graduate, or professional degree courses count.
There’s not a limit for how many years you can utilize this credit and it’s worth up to $2,000 on your tax return.
Unusual tax deductions
This deduction is for out of the norm, but legitimate tax deductions.
This can be for a guard dog guarding your business, paying your child an income, or paying for special clothes and uniforms.
Keep good records for things like these, so when you claim them the IRS can verify the legitimacy.
Social Security for the self employed
When you work for yourself, your Social Security and Medicare taxes are 15.3% because you’re both the employee and employer.
If you work for another person, you only pay your half of the taxes while they pay the other.
You can deduct 7.65% of the employer part.
The deadline for Americans to file their taxes is Monday, April 18, 2022.
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