Millions of consumers across the country are still dealing with getting all their important tax documents together for another filing season, and many are looking for deductions they can claim to they can reduce their liabilities in a number of significant ways. Fortunately, most people will qualify for at least one of the following.
The first of these can be applied to cover the cost of health insurance premiums, according to a report from Boston television station WBZ. For instance, if they are self-employed, they can write off 100 percent of their premiums. However, for those with plans provided by their employers, they can also be counted toward total medical expenses, which are deductible once they reach a value of 7.5 percent of annual income. Similarly, they can also write off long term care insurance premiums, also as part of medical expenses amounting to everything above 7.5 percent of the taxpayer's salary.
Moreover, those who pay for child care of some kind are often eligible for the eponymous tax credit, the report said. This can be worth up to $3,000 for one dependent, or $6,000 for two or more.
What about contributions?
When it comes to charitable donations, those made with cash or credit card must be documented in some way, either by the group receiving the contribution or a financial institution; by law, they must provide such proof if the gift is in excess of $250, the report said. However, non-cash contributions like clothing donations will likewise need to receipts, but not all will qualify, and the ways in which they are claimed are often closely monitored by the Internal Revenue Service. Finally, consumers with retirement savings accounts - including 401(k)s and the various types of IRAs - can deduct as much as $2,000 in contributions to these plans from their taxes as well.
Of course, consumers will need to keep diligent records to ensure that they're able to claim these deductions, as doing so without proof will almost certainly draw the attentions of the IRS. As such, working with a professional tax preparer may help to clarify exactly which they can obtain, and understand what they'll need to do so.
Disclaimer: Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in the 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 advice based on your individual needs.