Common Tax Breaks That You Can Take Advantage

Charitable Tax Deductions

Cash and Item donations to tax-exempt organizations could be tax-deductible.

The catch is a thorough record-keeping requirement and is consistent throughout the year.

Claims for non-cash donations, under certain guidelines, are important to take note of.

Higher Education Learning Credits

You have 2 options:

Lifetime Learning Credit: It can give you credit on qualified tuition and related expenses paid for eligible students enrolled in an eligible school.

One big advantage is there is no limit on the number of years you can claim the credit.

And it could be as much as $2000 per tax filing.

There are income limits for the credit. $67,000 for single individuals, and $134,000 for joint filers.

Make sure to ask your tax professional how to plan this credit for you.

The American Opportunity Tax Credit: This could be up to $2,500 credited to you. You can be eligible for this credit if you attend an academic period.

A summer school session is an Academic period.

Important Tip: You need to receive Form 1098-T from the school you attended by January 31. This is important because the form confirms your eligibility for this Credit.

Child/ Dependent Care Credit

If you have dependents under 13 years old and you need childcare, you’ll have access to childcare credit.

The credit could be as much as $3000 per individual. The expenses should be for the overall well-being of the individual.

You may need to keep those receipts just for reference in the future.

Moving Expenses for Active Military Members

As a member of the military service, you might get stationed in different places. Other than your allowance to move with your family. Expenses that were associated with your move could be deducted too.

Home Office Deduction

Home office deduction is pretty straightforward. If you use a portion of your home for business, you may qualify for a home office tax deduction.

Examples are:

Resellers for Amazon, eBay, Poshmark, or other selling platforms could use a room to set up photos and inventory.

Photographers can also use that spare room and deduct not only the equipment that they use but also the area that they use.

Main Tip: Take pictures of the area and measure the space that you are using. The IRS might ask for detailed proof that you are using it for business.