2021 Tax Deductions That Will Lower Your Taxable Income
Updated: Nov 3
Do you want to save more money on your taxes this year? If so, then it is inevitable that you know what deductions are available for you. Tax deductions will lower your taxable income and will put money back in your pocket every year, so there should be never a reason to not claim deductions. The only issue is that many Americans are not aware of what type of deductions they qualify for.
Student Loan Interest
Student loan interest deductions may just be the biggest money saver you can claim. You can deduct this even if you didn't pay it yourself as long as you are the one who is responsible for it. If someone else pays the debt, the IRS treats it as if you were given the money and used it to pay the student loan, according to new rules. You would be qualified for the deduction if you met all of the conditions.
Rather than giving your money to Uncle Sam, you can give it to a qualified charity. You may be eligible to deduct the value of your charitable donations from your taxable income, whether they're in cash or property like clothing or a car. You may also be able to deduct $300 on your tax return without having to itemize for the 2020 tax year.
Medical Expenses Deduction
The government understands how expensive medical bills can get. There is a tax deduction for all of your medical expenses that are not covered by insurance as long as the invoice is more than 7.5% of your adjusted gross income. This includes dental treatments, prescription drugs and over-the-counter medicine.
Child & Dependent Care Deduction
The child tax credit will provide up to $3,000 per qualified dependent child aged 17 or younger on December 31st, 2021. If your kid is under the age of six, the credit rises to $3,600. This is a tax credit, which implies that it reduces your bill by the dollar.
Majority of taxpayers have only scratched the surface in terms of what deductions and credits are available, but on the topic of saving money, Americans with back taxes and unfiled years are also offered relief. There's a relief program that consolidates many major relief programs into a one-size-fits-all assistance program; The IRS Fresh Start Program. Our clients are referred to our Fresh Start Program in order to avoid bankruptcy, acquire debt relief, and settle their debts in a quick manner. Let us give you a helping hand today!
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