USA News

10 tax breaks you may be entitled to this year

(NEXSTAR) – Tax Day is just days away – have you filed yours yet? If not, you still have the opportunity to take advantage of these oft-forgotten deductions and tax credits.

Deductions reduce the amount of your income before calculating the tax owed, explains the Internal Revenue Service. Similarly, tax credits can reduce the amount of tax you owe or increase your tax refund.

Tax deductions

Sales tax

Instead of deducting income taxes, you can choose to deduct state and local general sales taxes. In most cases, you can do this if the tax rate in 2021 was the same as the general sales tax rate, according to the IRS.

Medical and dental expenses

You can deduct medical or dental expenses you paid for yourself, your spouse, and your dependents if the amount of your total medical expenses exceeds 7.5% of your adjusted gross income, reports the IRS.

“Medical care expenditures include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for treatments affecting any structure or function of the body.”

Teachers’ expenses

If you are a teacher, you can deduct up to $250 of any unreimbursed expenses for classroom materials such as books, supplies, computers, or other equipment used in your classroom.

Charitable donations

Money or property you donated to certain groups – religious organizations, government for public purposes, non-profit schools and hospitals, veterans groups, and many other organizations – can be deducted as charitable contributions , according to the IRS.

Generally, you can deduct the fair market value of your contribution, but in most cases your contribution cannot exceed 60% of your adjusted gross income.

Work at home

If you are self-employed or a partner and work from home, you may be able to deduct certain expenses. The IRS explains that if you regularly and exclusively use your home as your principal place of business or to meet with patients, clients, or clients, you may qualify for this deduction.

You may also qualify if you use part of your home as a warehouse for inventory or product samples, as a rental or as a daycare. The use of a separate structure not attached to your home may also qualify.

The part of your home used for business purposes cannot be used for personal purposes, reports the IRS. More details here.

Drive for work

Speaking of work, have you been to the office this year? It could be a radiation.

If you use your car for business and personal purposes, the IRS says you can deduct the cost of using it for business purposes. This can be done by calculating the standard mileage rate method or the actual expense method.

You are required by law to support your expenses with records or with sufficient evidence to support your claim, according to the IRS.

Tax credits

Child tax credit

Perhaps one of the best-known tax credits this year is the second half of child tax credit payments. The federal government recently launched a revamped website to help determine if you qualify for the credit.

For more information, click here.

Driving an electric vehicle

Have you traveled to work (or elsewhere) in an electric vehicle? If your vehicle meets specific requirements, you could benefit from a tax credit.

Under Section 30D(a), the IRS explains that you can receive the plug-in electric vehicle credit if you purchased a car or truck that has at least four wheels, weighs less than 14,000 pounds, and uses the energy from a battery with at least 4 kilowatt hours rechargeable from an external source.

You must have purchased the vehicle in or after 2010 and started driving it the same year you claim the credit, according to the IRS. When the manufacturer sells 200,000 qualifying vehicles, the credit begins to disappear for that manufacturer.

Energy efficient home improvements

If you have certain energy-efficient aspects of your home, you could receive a tax credit. Electric heating and solar water; small wind power; geothermal heat pump; biofuel; and fuel cell ownership costs are eligible for Form 5695.

The form is for energy efficient noncommercial and residential real estate loans, the IRS explains.

Adoption

Eligible adoption expenses may entitle you to a tax credit and income exclusion for employer-provided adoption assistance.

According to the IRS, expenses include reasonable and necessary adoption expenses; court costs and attorney’s fees; Trip costs; and other expenses directly related to the adoption of an eligible child.

More details here.

This year’s tax day has been moved to April 18.


whnt

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
Back to top button