Tax season has just passed for many, but there’s still some time to file for those with an extension.
And tax experts from TurboTax are taking the opportunity to talk about some of the most-missed tax deductions and credits you can take advantage of today – if you haven’t filed yet.
From tax deductible car donations to 401k credits, here are four tax deductions that as many as 20% of people are missing out on.
Earned Income Tax Credit
First, there’s the Earned Income Tax Credit – a credit for low to moderate-income individuals and families who make under $59,000 a year.
Other requirements include being a U.S. citizen, having less than $10,000 in investment income, and specific requirements for separated partners not filing jointly.
You can receive a credit between $600 (for no children) and $7,000 (for three or more qualifying children).
Home Loan and Refinancing Deductions
Home Mortgage Points are “points” you obtain for paying certain charges on a home mortgage or mortgage interest. According to the IRS, they can also be called loan origination fees, maximum loan charges, loan discounts, or discount points.
You can deduct those points each year on your tax return or all the points on your previous loan at once if you refinance! The amount you deduct depends on the size of your mortgage.
Tax Deductible Donations
A tax deductible donation is any cash or property given to a qualified organization. Once donated, you can deduct the cash or appraised property amount from your taxes.
If you make a tax deductible car donation or monetary donation to churches or charities earlier in the year, it can be hard to remember to apply that deduction at the end of the year – especially if you have to hold onto the paperwork.
You can contact the organization you donated to for a copy of the paperwork you need for filing.
The Saver’s Credit
Also called the Retirement Savings Contribution Credit, the Saver’s Credit is for people who invest in Roth IRAs, 401ks, or ABLE accounts.
By meeting certain requirements (like elective salary deferral contributions for 401ks or making any contribution to a Roth IRA), you can have 10%, 20%, or 50% of the amount you put into retirement returned to you in the form of a tax credit.
Single filers can receive up to $1,000, and joint filers can get up to $2,000.
Take Advantage of These Tax Deductions Today
Whether you’ve learned how to use the Earned Income Tax Credit or been inspired to make a retirement account or a tax deductible car donation, many people can save money by knowing about these credits and deductions.
And stick around to learn more about car donation, community assistance, and how to make the most of your tax deductions from Newgate School today.
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