{"id":9270,"date":"2025-01-31T18:43:31","date_gmt":"2025-01-31T18:43:31","guid":{"rendered":"https:\/\/finderica.com\/?p=9270"},"modified":"2025-01-31T18:43:31","modified_gmt":"2025-01-31T18:43:31","slug":"tax-deductions-explained-and-common-ones-you-could-claim","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=9270","title":{"rendered":"Tax Deductions Explained (and Common Ones You Could Claim)"},"content":{"rendered":"\n<div>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"lazyload clicker_number\" style=\"position: absolute; height: 1px; width: 100%\" alt=\"ScoreCard Research\" data-count=\"104.245.38.58,104.245.38.58, 108.162.245.218\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\"><\/p>\n<p><span style=\"font-weight: 400;\">Part of being an American is looking toward Tax Day with either dread or anticipation \u2014 no matter how far out it is. Will you have to cut a check to Uncle Sam, or will you get a plump refund? Tax deductions can tip the scales \u2014 a lot \u2014 meaning you\u2019ll end up sending less money to the IRS.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Read on to understand which common tax deductions you could claim when you <\/span><b>file your tax return<\/b><span style=\"font-weight: 400;\"> for 2024. Note that we use 2024 because that\u2019s the tax year for which you will be filing for by the April 15 deadline.<\/span><\/p>\n<p><strong>More from The SS:\u00a0<\/strong><a href=\"https:\/\/partners.thepennyhoarder.com\/spending-too-much-prt\/?aff_id=401\" target=\"_blank\" rel=\"noopener\">The\u00a0Dumbest Things We Keep Spending Too Much Money On<\/a><\/p>\n<div class=\"adBorder\" id=\"thepe-249490396\">\n<h3>Is Your Paycheck Not Going As Far As It Used To?<\/h3>\n<p>We get it. <em>Everything<\/em> is more expensive than it used to be, but your paycheck hasn\u2019t kept up.<\/p>\n<p>When money is tight, <a href=\"https:\/\/partners.thepennyhoarder.com\/when-money-is-tight-sdyn-prt\/?aff_id=384&amp;aff_sub3=when-money-is-tight-sdyn-prt\/&amp;aff_sub4=191766\" rel=\"false noopener\" target=\"_blank\">these resources<\/a> will help nearly everyone.<\/p>\n<\/div>\n<h2 class=\"wp-block-heading\"><b>What Is a Tax Deduction?<\/b><\/h2>\n<p>Tax deductions, also known as tax write-offs, lower your taxable income so you\u2019ll pay less overall. You can either go with the standard deduction, which is a predetermined amount that is subtracted from your income, or itemized deductions, which take into account your particular expenses such as charitable donations and some health care costs.<\/p>\n<p>However, your itemized deductions have to exceed your standard deduction or it is not smart to itemize. Since the federal government changed the tax rules in 2017 to increase the standard deduction, only about 10% of mostly wealthy Americans itemize deductions, according to the Urban-Brookings Tax Policy Center.<\/p>\n<p><span style=\"font-weight: 400;\">The standard deduction amounts for tax year 2024 are:<\/span><\/p>\n<ul>\n<li><b>Single or married filing separately:<\/b><span style=\"font-weight: 400;\"> $14,600<\/span><\/li>\n<li><b>Married filing jointly and surviving spouses:<\/b><span style=\"font-weight: 400;\"> $29,200<\/span><\/li>\n<li><b>Head of household:<\/b><span style=\"font-weight: 400;\"> $21,900<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Tax deductions are different from <\/span><b>tax credits<\/b><span style=\"font-weight: 400;\">. A tax deduction decreases your taxable income, whereas a tax credit lowers the amount of taxes you owe the IRS.<\/span><\/p>\n<h2 class=\"wp-block-heading\">Make Easy Money to Help Pay Your Tax Bill<\/h2>\n<p>Whether you expect to owe or get a return come tax time, we could all use a little bit of extra cash. From taking surveys to doing easy tasks online to just sharing your honest opinion, these are some of our favorite ways to make quick money. <\/p>\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400;\"><strong>Calculating Your Adjusted Gross Income<\/strong><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Deductions are typically calculated from something called your adjusted gross income, or AGI.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Do you know how much you make each year? What about the amount you contribute to retirement? The IRS uses this information and more to calculate your adjusted gross income (AGI), which is the starting point for figuring out your tax bill.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Your AGI includes your wages, alimony income from divorces finalized before 2019, dividend income, retirement distributions and business income. Student loan interest payments, <\/span><b>health savings account<\/b><span style=\"font-weight: 400;\"> contributions and many contributions to a <\/span>traditional IRA<span style=\"font-weight: 400;\"> can be deducted above the line, meaning you can deduct them even if you\u2019re taking the standard deduction. What\u2019s left over is your AGI.<\/span><\/p>\n<p><strong>More From The SS:<\/strong>\u00a0<a href=\"https:\/\/partners.thepennyhoarder.com\/50-ways-apps-sdyn-prt\/?aff_id=401\" target=\"_blank\" rel=\"noopener\">50 Easy Ways You Could Make Extra Money This Month<\/a><\/p>\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400;\"><strong>Changes From 2017 Tax Reform<\/strong><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">In late 2017, Congress passed the Tax Cuts and Jobs Act, a sweeping overhaul of the federal tax code. The main change affecting everyday Americans was to the standard deduction. In 2017, it was $6,350 for single filers and $12,700 for married couples filing jointly. Under the new law, it nearly doubled.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While the 2017 changes were good news for some people, they came at the expense of several popular deductions that were eliminated. These include:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Job-related moving expenses for people who aren\u2019t in the military<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Home equity loan interest deduction, unless the loan is used to improve the home<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Alimony for the person paying spousal support<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Job search expenses<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Unreimbursed work expenses<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The higher standard deduction made itemizing less worthwhile for many taxpayers. Itemizing was often the default choice for homeowners with a mortgage in the past because of the mortgage interest deduction. But now choosing the standard deduction often yields the bigger tax savings.<\/span><\/p>\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400;\"><strong>Standard vs. Itemized Deductions<\/strong><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Still, a number of itemized deductions remain in play.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If your potential deductions equal more than the standard deduction, itemizing will lower your taxable income and save you money.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here\u2019s another way to think about it: If you\u2019re a young, single person with a full-time job, you\u2019re healthy and you rent rather than own a home, you will almost certainly take the standard deduction because your deductible expenses probably didn\u2019t total more than $14,600 in 2024.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But if your financial profile is more complex \u2014 think mortgage, property taxes, large medical expenses \u2014 then you might benefit from itemizing.<\/span><\/p>\n<h2 class=\"wp-block-heading\">Popular Tax Deductions for Itemizers<\/h2>\n<p>If you think you should itemize, you need to know what is and isn\u2019t tax deductible. Here are some common deductions.<\/p>\n<h3 class=\"wp-block-heading\">1. Charitable Contributions<\/h3>\n<p><span style=\"font-weight: 400;\">If you gave money or goods to a charity during the year, you could be eligible for a tax deduction. The IRS must designate the organization as a nonprofit. Usually these are religious, educational or charitable groups.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are some limitations on what you can include in this deduction. For example, if you donated to your local PBS station and they sent you a \u201cthank you\u201d T-shirt, you can\u2019t deduct the value of the shirt. So if your contribution was $100 and the T-shirt was worth $10, you can only deduct $90 on your tax return.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Additionally, you can only deduct charitable contributions up to 50% of your AGI. (Most people can\u2019t afford to donate half their income to charity anyway.) But there are additional limits depending on the organization. Donations to churches, hospitals and colleges qualify up to 50% of AGI, but contributions to veterans\u2019 organizations and fraternal societies have a lower cap \u2014 only 30% of AGI.<\/span><\/p>\n<p><strong>Related:<\/strong> Here\u2019s How to Start Saving Money \u2014 Even If You Don\u2019t Have Room in Your Budget<\/p>\n<h3 class=\"wp-block-heading\">2. Mortgage Interest<\/h3>\n<p><span style=\"font-weight: 400;\">The interest you pay on your home mortgage can total many thousands of dollars, particularly at the beginning of the loan. Luckily, you can deduct that interest from your taxable income. This is applicable for debt up to $750,000 or $375,000 if you\u2019re married filing separately through 2025. If you bought your home on or before Dec. 15, 2017, you can deduct mortgage interest on debt up to $1 million or $500,000 if you\u2019re married filing separately.<\/span><\/p>\n<h3 class=\"wp-block-heading\">3. Property Taxes<\/h3>\n<p><span style=\"font-weight: 400;\">The 2017 tax reform put new limits on property tax deductions. As of 2018, you can deduct state and local taxes up to $10,000 or $5,000 if you\u2019re married filing separately. Those caps are for state and local income, property and sales taxes combined.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Let\u2019s say you paid $8,000 of state income tax, $7,000 of property taxes and $6,000 of sales tax. Your deduction is limited to $10,000. Prior to tax reform, you could have deducted each of these expenses in full.<\/span><\/p>\n<h3 class=\"wp-block-heading\">4. Medical Expenses<\/h3>\n<p><span style=\"font-weight: 400;\">If you had significant medical expenses last tax year that weren\u2019t reimbursed by insurance, you could get a deduction. The bills must equal 7.5% or higher of your AGI to qualify for the deduction in 2024. Even then, you can only deduct the amount above 7.5% of AGI.\u00a0 For someone with an AGI of $50,000, that means you can\u2019t deduct medical expenses until they exceed $3,750, or 7.5%.<\/span><\/p>\n<p>Qualified medical expenses include:<\/p>\n<ul>\n<li>Bills paid to doctors, dentists, chiropractors and more<\/li>\n<li>Hospital visits or stays<\/li>\n<li>Nursing home care<\/li>\n<li>Some weight loss programs<\/li>\n<li>Addiction programs<\/li>\n<li>Prescription medications<\/li>\n<li>Transportation to and from medical appointments<\/li>\n<li>Acupuncture<\/li>\n<li>Dentures, crutches, hearing aids, wheelchairs and service animals<\/li>\n<li>Reading or prescription glasses or contact lenses<\/li>\n<\/ul>\n<div class=\"adBorder\" id=\"thepe-771938970\">\n<h3>Heard of These Money-Making Hacks?<\/h3>\n<p>Ready to find out how some folks effortlessly earn the big bucks?<\/p>\n<p>Millions of Americans ignore\u00a0<a href=\"https:\/\/partners.thepennyhoarder.com\/smarten-up-americans-prt\/?aff_id=384&amp;aff_sub3=smarten-up-americans-prt\/&amp;aff_sub4=191931\" rel=\"false noopener\" target=\"_blank\">these easy tips<\/a>\u00a0that could have you padding your wallet in no time.<\/p>\n<\/div>\n<h2 class=\"wp-block-heading\">Deductions You Can Claim With the Standard Deduction<\/h2>\n<p>Even if you don\u2019t itemize, there are some valuable deductions you can still claim. They\u2019re known as \u201cabove-the-line\u201d deductions.<\/p>\n<h3 class=\"wp-block-heading\">1. Educator Expenses<\/h3>\n<p><span style=\"font-weight: 400;\">In an ideal world, teachers wouldn\u2019t have to pay out of pocket for school supplies. In reality, most teachers routinely dip into their own funds to buy pencils, paper, glue and other items for their classrooms. The IRS allows K-12 teachers to deduct up to $250 ($500 for married filing jointly) for educator expenses such as classroom materials.<\/span><\/p>\n<h3 class=\"wp-block-heading\">2. Student Loan Interest<\/h3>\n<p><span style=\"font-weight: 400;\">If you paid interest on your student loans, you can deduct up to $2,500 in interest payments if you earned less than $75,000 for single filers or $150,000 if you\u2019re married filing jointly. Above that, the deduction phases out, but those earning up to $95,000 as single filers or $195,000 for those who are married filing jointly can get a reduced deduction.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This only applies for people filing their own tax returns. If you\u2019re still listed as a dependent on your parents\u2019 tax return, you can\u2019t claim the student loan interest deduction. You also can\u2019t claim this deduction if your loan isn\u2019t in your name. So, if your parents took out the loan on your behalf, they will get the deduction instead.<\/span><\/p>\n<h3 class=\"wp-block-heading\">3. Moving Expenses for Military<\/h3>\n<p>Members of the military are eligible to deduct moving expenses from their taxable income. In previous years, civilians could also deduct moving expenses, but the deduction is now limited to military personnel.<\/p>\n<p><strong>More From The SS:<\/strong> 17 Make-Your-Own-Schedule Jobs You Can Do From Home<\/p>\n<h3 class=\"wp-block-heading\">4. Health Savings Account Contributions<\/h3>\n<p><span style=\"font-weight: 400;\">Health savings accounts, or HSAs, are accounts you can use to save for medical expenses if you have a high-deductible health insurance plan. A high-deductible plan is defined as one that has a minimum deductible of $1,600 for a single person or $3,200 for a family in 2024.<\/span><\/p>\n<h3 class=\"wp-block-heading\">5. Self-Employment Expenses<\/h3>\n<p>If you\u2019re self-employed, you can deduct quite a few expenses. These include:<\/p>\n<ul>\n<li><b>Home office:<\/b><span style=\"font-weight: 400;\"> You can deduct the space devoted to your home office if you\u2019re self-employed. However, you must use this space exclusively for business. You can\u2019t take this deduction if you\u2019re traditionally employed, even if you\u2019re working remotely.<\/span><\/li>\n<li><b>Education: <\/b><span style=\"font-weight: 400;\">As a self-employed individual, you can deduct things like tuition, books and lab fees for education that \u201cmaintains or improves skills needed in your present work,\u201d according to the IRS.<\/span><\/li>\n<li><b>Car<\/b><span style=\"font-weight: 400;\">: If you use your car for business, such as driving to meetings with clients or vendors, you can deduct 67 cents per mile as of 2024.<\/span><\/li>\n<\/ul>\n<h3 class=\"wp-block-heading\">6. Health Insurance Premiums<\/h3>\n<p>If you are self-employed, you can deduct your health premiums. You can also take the deduction, minus any subsidies you received, if you get your health insurance through a state or federal marketplace.<\/p>\n<h3 class=\"wp-block-heading\">7. IRA Contributions<\/h3>\n<p><span style=\"font-weight: 400;\">You could get a tax deduction if you contribute to a traditional IRA as part of your retirement savings portfolio. The maximum contribution for 2024 was $7,000, and $8,000 for those over age 50. You may be able to deduct your contribution depending on how much money you make and whether you or your spouse has an employer-sponsored retirement plan. <\/span><\/p>\n<p><strong>More from The SS:<\/strong><\/p>\n<div class=\"adBorder\" id=\"thepe-335343668\">\n<h3>Need Some Quick Cash?<\/h3>\n<p>If you\u2019re looking to boost your income this month, we\u2019ve got just the thing for you.<\/p>\n<p>From quick gigs to smart side hustles, check out <a href=\"https:\/\/partners.thepennyhoarder.com\/50-ways-sdyn-prt\/?aff_id=384&amp;aff_sub3=50-ways-sdyn-prt\/&amp;aff_sub4=191813\" target=\"_blank\" rel=\"noopener\">these 50 easy ways to make a quick buck<\/a> \u2014 there\u2019s something for everyone.<\/p>\n<\/div>\n<p><i>Ohio-based Catherine Hiles is a British writer and editor living and working in the U.S. She has a degree in communications from the University of Chester in the U.K. and writes about finance, cars, pet ownership and parenting.\u00a0<\/i><\/p>\n<p>        <!-- ACF Financial Disclaimer --><\/p>\n<p>        <!-- End ACF Financial Disclaimer --><\/p>\n<p>        <!-- Newsletter Signup Form --><\/p>\n<hr>\n<hr>\n<div class=\"newsletter-signup-wrapper-for-digioh\">\n<div class=\"col-xs-12 newsletter-wrap flex-row\">\n<div class=\"container flex-container\">\n<div class=\"col-xs-12 new-newsletter-form\">\n<p class=\"text-subheading\">Ready to stop worrying about money?<\/p>\n<p class=\"text-get-daily\">Get the SS Daily<\/p>\n<p class=\"email-privacy-policy-blurb-white\">\n<\/p><\/div>\n<\/div><\/div>\n<\/p><\/div>\n<p>        <!-- End Newsletter Signup Form --><\/p><\/div>\n<p><script type=\"text\/javascript\" id=\"wp-fcapi-js-before\">\n\/* <![CDATA[ *\/\n!function(f,b,e,v,n,t,s)\n{if(f.fbq)return;n=f.fbq=function(){n.callMethod?\nn.callMethod.apply(n,arguments):n.queue.push(arguments)};\nif(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';\nn.queue=[];t=b.createElement(e);t.async=!0;\nt.src=v;s=b.getElementsByTagName(e)[0];\ns.parentNode.insertBefore(t,s)}(window, document,'script',\n'https:\/\/connect.facebook.net\/en_US\/fbevents.js');\nfbq('init', '263664193816679');\n\/* ]]> *\/\n<\/script><br \/>\n<br \/><a href=\"https:\/\/www.thepennyhoarder.com\/taxes\/tax-deductions\/\" target=\"_blank\" rel=\"noopener\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Part of being an American is looking toward Tax Day with either dread or anticipation \u2014 no matter how far out it is. Will you have to cut a check to Uncle Sam, or will you get a plump refund? Tax deductions can tip the scales \u2014 a lot \u2014 meaning you\u2019ll end up sending<\/p>\n","protected":false},"author":1,"featured_media":9271,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[188],"tags":[371,1279,3503,699,97],"class_list":{"0":"post-9270","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-taxes","8":"tag-claim","9":"tag-common","10":"tag-deductions","11":"tag-explained","12":"tag-tax"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/9270","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9270"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/9270\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/9271"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9270"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9270"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9270"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}