5 Often Overlooked Income Tax Breaks

If neither you nor your spouse is covered by a workplace retirement plan such as a 401, you can deduct the full amount of your contribution. The deduction faces limits if you or your spouse is covered by a retirement plan at work, or if your modified adjusted gross income exceeds certain levels. This one isn’t specifically a deduction, but it can ensure you save a bunch on your taxes every year.

Based on that example, that amounts to $33 a year for each $1,000 of points you paid. Many employers pay employees’ full salaries while those employees serve on jury duty.

Child and Dependent Care Credit

With this credit, up to $6,000 in child care expenses can qualify. But, it’s important to note that funds from a tax-favored reimbursement account at work do not qualify. For 20 of the most commonly missed tax deductions for your 2020 tax bill, read on below. Most people know that mortgage interest is deductible, but most student loan interest is deductible, too. You can deduct up to $2,500 in interest each year, or the amount you actually paid, whichever is smaller. If you paid more than $600 in interest, you should get aForm 1098-E, Student Loan Interest Statement.

• This material was developed and produced by FMG Suite to provide information on a topic that may be of interest.
• The slips of paper you cram into your wallet can mean more money in your bank account come tax season.
• It’s hard to overlook the big charitable gifts you made during the year by check or payroll deduction.
• You may be aware now more than ever of important financial areas that are not up to par.

The best way to see what you can deduct is to use the IRS’s Sales Tax Calculator. Keep in mind, the total of your itemized deductions for all of your state and local taxes is limited to $10,000 per year. Certain credits may give you a refund even if you don’t owe any tax. Registered Representatives of Cetera Advisor Networks LLC may only conduct business with residents of the states and/or jurisdictions in which they are properly registered. Not all of the products and services referenced on this site may be available in every state and through every representative listed.

Medical Expenses

WFS is separately owned and other entities and/or marketing names, products or services referenced here are independent of WFS. Advisory Persons of Thrivent provide advisory services under a “doing business as” name or may have their own legal business entities. However, advisory services are engaged exclusively through Thrivent Advisor Network, LLC, a registered investment adviser. PalomarWealth and Thrivent Advisor Network, LLC are not affiliated companies. You may also be eligible to claim expenses that you incurred with either buying or owning a house during the tax year.

In particular, you can deduct up to $500 of adjustments made to improve your home’s energy efficiency. Likewise, you can deduct up to 30 percent of the cost of energy efficient appliances from your taxes. Investment Advisory products and services are being offered through Ethos Financial Group, LLC an SEC-registered investment advisor. John brings 25 years of experience, helping clients buy insurance, and understanding what insurance fits their lifestyle. John spends most days setting the vision and strategy for the agency.

Home mortgage interest

If you pay a financial advisor to handle the details and the fees they charge represent more than 2% of your AGI, these expenses can be itemized on your tax return and taken as a deduction. Before filing your taxes, review your financial planning expenses to see if this may be an option for you.

Tax deductions reduce the amount of taxes you owe to the IRS and ease the financial burden you face when you file your returns each year. However, some of the most lucrative eligible deductions are overlooked simply because most taxpayers do not know about them. You could lower your tax obligation and even get a refund by claiming these deductions if you are eligible for https://turbo-tax.org/ them. When it comes to tax deductions, this list covers just a handful of the dozens taxpayers can potentially claim. If you’re worried about finding all of the possible deductions you may be eligible for, there’s no need to stress. File your taxes with us, and our easy-to-use platform will help to identify deductions for you so that you can maximize your tax refund.

Then remember to include that amount with your state tax itemized deduction on your 2022 return, along with state income taxes withheld from your paychecks or paid via quarterly estimated payments. Beginning in 2018, the deduction for state and local taxes is limited to a maximum of $10,000 The Most Overlooked Tax Deductions per year. Investment advisory services offered through Thrivent Advisor Network, LLC., (herein referred to as “Thrivent”), a registered investment adviser. Clients will separately engage an unaffiliated broker-dealer or custodian to safeguard their investment advisory assets.