There are three truths in life. We all will live. We all will die, and we all will pay taxes. Paying taxes is something that most of us certainly dread, as seeing your hard-earned money get handed over is a bit of a killjoy, but the good news is that there are multiple tax deductions that you can take which can help to lower your tax liability. Today, we are here to give you some insight into some tax deductions which are commonly overlooked because every little bit that you can save helps.
The tax code is always changing, so it is always a good idea to check into any new rule changes that could benefit you especially if you are not choosing to take the standard deduction offered by the Internal Revenue Service (IRS). Itemized deductions can save you a major amount of green, and are worth the extra diligence in record keeping. Check out some of these great deductions worth looking into.
A Home Run
Home ownership can provide multiple opportunities to reduce what you owe to Uncle Sam. You can deduct the interest points that you paid on your home purchase as well as interest that you shell out with your monthly mortgage payments. You can also deduct your property taxes and private mortgage insurance costs. Over the course of a year, all of these can add up quickly.
A Driving Force
It may not seem like a lot, but in most states, you can deduct the amount you pay for your annual vehicle registration. Additionally, you can sometimes also count registration fees for boats and RVs too. Just remember, every little bit counts.
Try a Good Deed
Sharing is caring, and this applies to tax breaks too. The IRS allows you to deduct charitable giving. So, whether you are donating clothing to Goodwill or food to a local food pantry, you can give yourself a write off. With the CARES Act of 2020, Americans are able to write off charitable contributions up to 100% of their adjusted gross income (AGI). So, give all that you can, and get back more of a refund.
A Healthy Tax Break
Being healthy is a priceless gift, but medical care is a major expense in many households. The positive news is that you can deduct several expenses that are related to healthcare. These include travel to and from medical appointments, co-payments for appointments, laboratory fees, and prescription costs. You are also eligible for write-offs for other medical related expenses for everything from therapy to programs designed to help you quit smoking. In fact, medical expenses are one of the broadest deduction categories you can have.
As you can see, there are quite possibly many tax breaks available to you that you have not been taking advantage of. For more great tax knowledge that can help you save money, keep checking back with us at Maggi Tax today.