30% of taxpayers choose to file itemized deductions each year.
By itemizing your deductions, you can go from owing on your taxes to receiving a nice tax return. But only if you itemize carefully and consider all the tax deductions you qualify for.
Tax season is approaching soon, so if you’ve been wondering “What can I write off on my taxes?” check out these often-overlooked deductions.
1. Charitable Contributions
Charitable contributions are one of the most common tax deductions. But many people forget about all the charitable contributions they make throughout the year.
Here are a few organizations you should be including on your tax deductions:
- Religious organizations
- Schools and educational organizations
- Service organizations
Wondering if a specific organization qualifies? Check out the IRS’s tax-exempt organization search.
There are limits to how much you can deduct. Most charitable contribution deductions cannot exceed 50% of your adjusted gross income.
2. Military Moving Expenses
Are you in the military and recently had to move for your work? If so, you are eligible for one of the commonly missed tax deductions.
This move has to be a permanent change of station. This means you moved from home to your first active duty post, moved from one permanent post to another, or moved from your last post of duty to a new home.
Moving is hard enough, so make sure to take advantage of this exemption if you qualify.
3. Sales Tax
Sales tax offers an often forgotten tax break. If your state doesn’t charge an income tax, take advantage of this deduction. You must choose to either deduct your income tax or sales tax.
This deduction is perfect if you made a large purchase, like a car, boat, or engagement ring. The maximum deduction is $10,000.
Don’t forget to save as much money as you can while filing your taxes.
4. Earned Income Tax Credit
The earned income tax credit benefits low to middle-income families with children.
The maximum credit for the deduction is $6,318. The amount you receive depends on your income and the size of your family.
You should check to see if you qualify for this credit yearly, as your qualifications are continuously changing. People who took a pay cut, lost a job, or worked fewer hours than previous years may find that they qualify.
5. Student Loan Interest
With student loan debt on the rise, odds are someone in your family is still paying off their loans. If you paid at least $600 in student loan interest in the past year, you could qualify for this tax deduction.
The maximum amount of interest you can deduct is $2,500. This could include your own, a dependant, or a spouse’s student loans.
If the tax deduction isn’t enough motivation, discover seven more reasons why you should consider going back to college.
Still Asking What Can I Write Off on My Taxes?
Still asking, “what can I write off on my taxes?” If so, it may be time to reach out for professional help.
Tax professionals work hard at finding specific deductions you may qualify for. They may catch things that you would overlook by filing on your own.
Need more help before tax season? Check out this article on things you should know about not paying taxes.