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taxes and their deductions

 

There are only a few realizations which end up becoming more painful to a taxpayer who’s just filed a tax return and then realizing that you forgot to include a deduction that would have lowered your tax bill or increased your tax refund. In the rush to get your tax return completed by the deadline, it would all then be too easy to miss avenues that might lower your taxable income. Here are 3 of the deductions that many overlook.

The first are sales taxes. You would then have the option of deducting sales taxes or state taxes off your federal income tax. In a state that doesn’t have its own income tax, this can be a big money saver. Even if you have already been able to pay state taxes, the sales tax break might be a better deal if you made a big purchase like an engagement ring or a car. You have to itemize to take the deduction, but the IRS provides tables to use as a guide. Next would be the Health Insurance Premiums. Here, the medical expenses can blow any budget, and then the IRS is sympathetic to the cost of insurance premiums, at least in some cases. For many of the taxpayers, medical expenses have to exceed 7.5% of your adjusted gross income to be deducted. However, if you’re self employed and you are the one who is responsible for your own health insurance coverage, you can deduct 100 percent of your premium cost. This is what gets taken off your adjusted gross income rather than as an itemized deduction. Lastly, you have the Tax Savings for Teacher. This is the rare teacher who doesn’t have to reach into her own pocket every now and then to purchase items needed which are needed for the classroom. While it may sometimes seem like nobody appreciates that largesse, the IRS actually does, surprisingly. It allows qualified K-12 educators to deduct up to $250 for materials. That gets subtracted from your income, so you can take advantage of it even if you don’t itemize.

 

 

 

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