Paying taxes is never fun. But missing out on savings feels even worse. Many people overlook easy tax deductions each year. Claiming them could lower your tax bill and keep more money in your pocket. Here are the 5 tax deductions you should check before filing.
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1. Home Office Deduction
Do you work from home? You may qualify for a home office deduction. It does not matter if you rent or own your space. If you use part of your home only for work, it counts.
The IRS has a simple method. You can claim $5 for each square foot of work space. The limit is 300 square feet. That means up to $1,500 in savings.
Keep in mind, the space must be used only for business. A corner of your bedroom that doubles as a desk area might not qualify. But a separate room or clearly defined space does.
2. Student Loan Interest Deduction
Still paying off student loans? You could deduct up to $2,500 in interest. This applies even if you do not itemize deductions.
The best part is you do not need to be the one who took the loan. If you make payments and are responsible for the debt, you may qualify.
There are income limits. Check your adjusted gross income. If it is too high, the deduction may phase out. But many borrowers still get a break.
3. Medical Expenses Deduction
Health costs add up fast. If your medical bills are high, you may get some relief. You can deduct expenses that are more than 7.5% of your adjusted gross income.
This includes doctor visits, surgery, dental work, prescription drugs, and even travel for care. Keep all receipts. You will need them if the IRS asks for proof.
Not all costs count. Cosmetic surgery and gym memberships usually do not qualify. But major health expenses do.
4. Charitable Donations Deduction
Donating to charity feels good, and it can save you money at tax time. Cash gifts are easy to track, but did you know non-cash donations also count?
Clothes, furniture, and household items given to charity can be deducted. Make sure you get a receipt. For items worth more than $500, you may need to file extra forms.
Even miles driven for charity events can be written off. The IRS allows 14 cents per mile. It may not sound like much, but it adds up.
5. State and Local Taxes Deduction (SALT)
If you pay state and local taxes, you may claim them on your federal return. This includes property taxes, income taxes, or sales taxes.
There is a cap though. The maximum deduction is $10,000. For married couples filing separately, the cap is $5,000.
If you made large purchases and paid high sales tax, compare that option to state income tax. You can choose whichever gives the bigger deduction.
Final Thoughts
Taxes are tough, but missing deductions is worse. These 5 tax deductions could help lower what you owe. Review your records, keep receipts, and double-check your eligibility. A little effort now could save you hundreds, maybe thousands, at filing time.
Frequenltu Asked Questions About 5 Tax Deductions
Q1.What are the top 5 tax deductions most people miss?
The most common ones are home office, student loan interest, medical expenses, charitable donations, and state or local taxes.
Q2.Can I claim a home office deduction if I rent?
Yes. Renters and homeowners can both claim the deduction if they use part of their home only for work.
Q3.How much student loan interest can I deduct?
You can deduct up to $2,500 in student loan interest each year if you qualify.
Q4.Do non-cash charitable donations count for tax deductions?
Yes. Clothes, furniture, and other household items donated to charity can be deducted if you keep receipts.
Related Read
If you want to learn how to build a budget that really works, check this guide: How to Create a Monthly Budget That Actually Works
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