For most people, any way to lower your tax bill each year during tax season is a good thing. No one wants to pay more to the IRS than is absolutely necessary. The best way to lower your tax bill is with deductions. Deductions are split up into three different categories: standard, itemized and above-the-line. Mark Dicus & Company is here to talk about each of these deductions so that you understand what deductions you may be eligible for.
The easiest deduction to claim on your taxes each year will be the standard deduction. It is a fixed amount that is based on your filing status as well as your income. If you are filing single, you get a standard deduction of $12,400 and if you are married filing jointly, you would get $24,800. For those that have simple taxes that don’t require any itemization, this is the best option for you.
What Things Qualify for Itemized Deductions?
While itemizing your deduction can take more time to do, some people benefit from this more than they do from the standard deduction. You have to list all of the qualifying deductions that you are eligible for. Some of them may include:
– Property Taxes: Any taxes that you pay for your vehicle, or your home can be deductions.
– State and Local Income Tax or Sales Tax: You can choose to either deduct your income or your sales tax. Some states don’t tax your income or vice versa so you have the ability to choose.
– Mortgage Expenses: Any mortgage interest or mortgage insurance can be a tax deduction.
– Medical & Dental Expenses: You may be able to deduct medical or dental expenses that are unreimbursed above a certain percentage of your income.
– Charitable Donations: If you give any cash donations to your church or donate any items to Good Will, you can deduct them from your taxes.
What are Above-The-Line Deductions?
The above-the-line deductions are freestanding from the other deductions. It doesn’t matter if you choose a standard deduction or itemized, you can still reap the benefits of these deductions as well. Some of the most common examples include:
– Education Expenses: Your tuition and fees that are paid as a student may be a qualifying expense. Some expenses for teachers also qualify for this deduction.
– IRA Contributions: Portions of qualifying IRA contributions can be deducted from your income.
– Self-Employment Tax: You can deduct half of your self-employment taxes.
– Student Loan Interest: Anybody paying back student loans can deduct some of the interest they are paying on their taxes.
Bookkeepers, Accountants & More in Summerlin, North LV, Henderson, Lone Mountain Village & Greater Las Vegas, Nevada
If you aren’t sure which deductions work best for your situation, you can turn to Mark Dicus & Company to help you sort it all out. We will make filing your taxes simple when you leave it up to us. We have the knowledge and expertise needed to help you take advantage of any tax breaks you’re eligible for. Call us today!