This year, just like every other one, millions of Americans fretted over their tax bills and made sure to claim every deduction for which they thought they might be eligible as a means of reducing their liabilities. Of course, every person's financial situation is different, for various reasons, and as such the types of breaks they took advantage of, likewise, varied widely.
The Internal Revenue Service saw consumers and corporations alike claim some $1.4 trillion in tax breaks for 2013, and the largest portion of this - accounting for some $523 billion - came for miscellaneous but common allowances, according to a report from CNNMoney based on data from the Tax Policy Center. That includes deductions for tax payments made to state and local government, the Earned Income Tax Credit, dependents, education costs, charity contributions, money paid into Social Security, and so on. Another $117 billion was claimed to offset capital gains and dividends. In all, about $148 billion in tax breaks nationwide went to corporations, with the rest going to individuals.
The largest single category for which consumers took deductions was expenditures on health care, the report said. In all, Americans claimed a total of $383 billion for these expenses, though most of that was through the exclusion for employer-sponsored health insurance plans, rather than outright health care spending. Interestingly, though, about $34 billion of that number was also made up of the assistance in premium payments for low- and middle-income households, which was part of the Patient Protection and Affordable Care Act.
Another popular type of allowance
After health care deductions, the next most-claimed benefits were those for housing, such as those for mortgage interest payments or property taxes, the report said. In all, these totaled some $255 billion. Another $160 billion in tax breaks were granted for consumers who were contributing to or withdrawing from their retirement savings accounts.
Even though tax season is over, many Americans might not want to get too lax about their finances and how they'll affect their IRS liabilities for next year. Staying in regular contact with a tax professional may help many Americans stay on top of all the issues they may end up having to face when filing time rolls around again.
For a more in-depth look at Liberty Tax Service, visit the Give Me Liberty! Magazine. Follow Liberty Tax on Facebook and on Twitter or contact Liberty Tax directly at 1-877-at-Liberty.