Tax time is quickly approaching, and if you’re like most people, you are starting to think about how you can save money. The easiest way to keep more cash in your pocket is to find out which tax deductions you qualify for. Nearly every tax payer qualifies for some type of deduction, and depending on your age and job, you may qualify for many more. A few common tax deductions include donations, interest on secured loans you might have taken out, depreciating assets and various medical costs.
If you’ve donated items like clothing, furniture, autos or food in the last year, you can claim a deduction equal to the amount of your donation. To protect yourself in the event of an audit, always obtain receipts when making donations. Most charitable organizations will be more than happy to write out a receipt at the time of donation or give you a blank one to take home and fill out on your own.
Depending on what you used the money from a secured loan for, you may be able to claim the loan’s interest as a deduction. For example, if you take out a secured loan that is tied to your primary residence, you can claim the interest during tax time!
Another tax cut that many people don’t realize that they can take advantage of is medical costs. Every time you buy bandages, pain medicine or hearing aid batteries, you can claim a deduction on your taxes. You will have to pass a threshold before this deduction will take effect, so it’s important to always hold on to receipts.
Tax time is usually a stressful time for many people, in part because they worry about what their tax liability will be. You can help reduce the amount of money you owe by learning more about the deductions that are available to you and your family.