Everyone wants to owe nothing and get a big refund at tax time. The best way to do this is to take advantage of available tax breaks. Being that you’re probably not an expert, you may not have a clue what’s out there. Fortunately, we do and we’re willing to share our knowledge. Here are 5 tax deductions you may not know about.
Medical and dental expenses
The next time you start dreading that trip to the doctor, just think of all the tax savings you’re racking up in the process. If you itemize, you can deduct unreimbursed medical and dental expenses paid for you, your spouse and your dependents. Qualified expenses include payments for the diagnosis, treatment, or prevention of disease. The downside is you can only deduct the portion that exceeds 7.5% of your adjusted gross income.
Home ownership can be expensive, but it comes with tax benefits. One of them being that you can deduct the interest paid on a loan used to buy, build or improve your main or second home. How much interest you can deduct depends on when you bought your home. If it was before December 15, 2017, you can deduct the interest on mortgages up to $1,000,000 ($500,000 if married filing separately). Those who purchased their home after that point can only deduct the interest on mortgages up to $750,000 ($375,000 if married filing separate).
You may want to dig a little deeper into your wallet the next time you’re asked to donate to charity. If you itemize and give to a qualified organization, your contributions may be tax deductible. You can make a cash donation that’s up to 60 percent of your adjusted gross income.
Student loan interest
Sick and tired of paying your student loans? Well, we have some news that will make the pill a little easier to swallow. You can deduct up to $2,500 of student loan interest on your tax return.
Tuition and fees
Unless you’re fortunate enough to get a scholarship, going to college can cost an arm and a leg. Luckily, you can deduct up to $4,000 of tuition and fees you paid for yourself, your spouse or dependents. However, you cannot claim the deduction if your filing status is married filing separately.