You might be missing out on tax deductions that could save you money. Taking advantage of often-overlooked deductions can lower your taxable income. It’s important to understand which deductions you qualify for and how to claim them.
Vehicle sales tax
Did you know you can deduct the sales tax you paid when buying a vehicle? If you itemize deductions, you can choose between deducting state and local sales taxes or income taxes. In New York, where the sales tax can be significant, this deduction is worth considering. Remember to keep your vehicle purchase receipts to prove the amount you paid.
Charitable donations
Giving to charity can provide more than just a good feeling; it can also help reduce your tax bill. Donations of money, goods, or even stocks to qualified organizations are deductible. Keep records of your contributions, and ensure the IRS recognizes the organization.
Volunteering expenses
While you can’t deduct the value of your time spent volunteering, you can deduct certain out-of-pocket expenses related to your volunteer work. This includes travel costs, supplies, and uniforms necessary for your service. Keep detailed records and receipts for these expenses.
Medical expenses
You can deduct medical expenses that exceed 7.5% of your adjusted gross income. This includes payments for doctor visits, prescriptions, and even some home modifications for medical needs. Keep all medical bills and records organized to ensure you can claim these deductions.
Education expenses
If you or your dependents are taking courses to improve job skills, you may qualify for education-related deductions. The Lifetime Learning Credit, for example, can help offset costs for tuition and required course materials. Keep all receipts and records of enrollment to take advantage of these deductions.
Unlock your tax potential
Keeping track of your expenses and understanding the deductions available to you is essential to maximizing your tax savings. Stay informed and organized to make the most of these opportunities.