According to recent surveys, the average American pays over $10,000 in taxes every year. While this number is staggering, there are luckily many ways financially savvy Americans can save on their bill to Uncle Sam.
If you’re looking to get a bigger tax refund this year, you’ve come to the right place.
Here are 9 tax deductions you may qualify for that can help you save.
9 Tax Deductions That Save Money
If you pay sales taxes or state income taxes, you do not need to pay federal income tax on that money. This can be a good deduction to take if you live in a high income-tax state, or if you purchased an expensive item like an engagement ring or a car.
Health Care Expenses
The average American spends over $5,000 a year on health care. Luckily, for many individuals, some of this money can be tax deductible.
All out-of-pocket medical expenses are tax deductible. If you are self-employed, the money you spend on monthly premiums is also tax deductible.
Any donations or charitable gifts you make can be deducted from your taxes. This includes contributions to a charity, clothes donated to Goodwill, etc. Additionally, if you volunteer, you can deduct expenses like gas and car maintenance from your taxes.
If you want to continue your education, you will be able to deduct many school-related expenses from your taxes. This includes tuition, equipment, and books. Additionally, you may qualify for a tax credit in addition to the deduction.
Job Search Expenses
Looking for a new job can be expensive. Folks may have to purchase interview clothes, drive to interviews, and pay employment agencies. Luckily, these expenses can be deducted when you file your taxes.
If you get the job you are looking for, you can deduct certain work-related expenses. For instance, uniforms and equipment can be deducted. If you work for yourself, you can deduct travel-related expenses like your gas or airline fees.
What happens if you get your dream job, but it’s on the other side of the country? Any relocation costs that are not covered by your employer are tax deductible. In order to qualify for this deduction, your new job must be at least 50 miles further from home than your old job, and your move must be related to the job.
Savings Withdrawal Penalty
If you need cash and have to tap into your 401K early, you will have to pay a penalty. Fortunately, you can deduct this penalty from your income.
Although couples vow to stay together until death do them part, it doesn’t always work out that way.
If you have been divorced and are paying alimony to your ex, you may be able to deduct these payments. To qualify, you will need to demonstrate that you and your spouse are separated and no longer live together.
Get Tax Deductions Today
Are you ready to take advantages of the tax deductions you qualify for? Contact us to get connected with a tax professional and get started.