These days, many Americans are in the final stages of getting their annual tax filings together and want to make sure they're taking full advantage of the benefits being made available to them. Fortunately, there are many tax deductions consumers can claim no matter how much money they make.
Perhaps chief among these is the amount they pay for medical or dental expenses they might have faced over the course of the past year, according to a report from CNBC. For example, unreimbursed medical expenses that exceed 10 percent of adjusted gross income can be claimed as a deduction, and that threshold drops to 7.5 percent for those over the age of 65. In addition to the costs they might have faced for receiving the medical or dental treatment they received, this deduction can also be used to cover equipment expenses, medical supplies, and devices they might need to maintain their health.
Along similar lines, those who have health saving accounts can write off contributions up to $3,250 for individuals and $6,450 for families, which will lower their taxable income, the report said. When paying for qualified health expenses, not only are contributions tax-free, but so too are earnings on the account, as well as withdrawals. Further, health insurance premium deductions can also be obtained when Americans are self-employed.
Speaking of businesses
Consumers who work for themselves may also be able to deduct certain business expenses they run into over the course of the year, the report said. They may also be able to claim the home office deduction, but should be careful about doing so because the Internal Revenue Service has many strict rules about how this is made available, and claiming it can prompt an audit in many cases. In general, the maximum deduction for having a home office is $1,500 per year, based on $5 for every square foot of space up to a maximum of 300 feet.
In any event, those hoping to maximize their refunds might benefit from working with a tax professional on their returns, because these workers are likely to be well-versed in all the various breaks that will be available for each client.
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Disclaimer: Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.