When it comes to your taxes the word write-off isn’t something that is anything new. However, do you understand what that word really means and what it is? For many people, this can be a tricky part of filing their tax return. It can be made much easier when you understand what a write-off is. Mark Dicus & Company is here to explain what a tax write-off is and what some of the most common write-offs are for taxpayers.
What is a Tax Write Off Example?
A tax write-off is any legitimate expense that you can claim as a deduction from your taxable income. Some people refer to a tax write-off as a tax deduction too. Tax deductions are helpful when you are filing your taxes because they can lower your taxable income. This can have a big impact on the amount of money you owe or the amount of money you get back after you have filed your tax return. It can place you in a completely different tax bracket when the IRS looks at your income after all the deductions have been taken off.
What Write-Offs Can You Claim on Taxes?
While there are several different common tax write-offs, that doesn’t mean that every taxpayer is going to be eligible for them all. You may only be eligible for a handful of these write-offs. Here are some of the most common ones.
– Standard Deduction: This is a specific dollar amount that lowers your taxable income. For single people, the amount is $12,500. For those married filing jointly, the amount is $25,001.
– Mortgage Interest: Any interest that you pay on your home or homes up to $750,000 is a write-off.
– Student Loan Interest: If you have student loans, you can write-off the interest that you pay when you make less than $70,000 adjusted gross income for those that are single and $140,000 for those that are married and filing jointly. You can write-off up to $2,500.
– Charitable Donations: If you have contributed to a 501©3 organization, you may be able to write off up to $600 for married and $300 for those that are single.
– Medical & Dental Expenses: For those that can itemize their deductions, you can write off medical and dental expenses when those expenses exceed 7.5% of your adjusted gross income.
– Traditional IRA Contributions: If you are making contributions to a traditional IRA account with a MAGI under a certain limit, you can write-off up to $6,000 in contributions. If you are over the age of 50, you can write-off up to $7,000.
Tax Preparation, Filing & More in Summerlin, North LV, Henderson, Lone Mountain Village & Greater Las Vegas, Nevada
There are certainly more write-offs that people are able to take advantage of every year on their tax return. If you are confused about how write-offs work or feel that you aren’t taking advantage of write-offs that are available to you, you can turn to Mark Dicus & Company to help you prepare your taxes. Call us today!