By GreenPath Financial Wellness
Tax filing deadlines are approaching…have you filed yet? To lessen the anxiety of the season, take this opportunity to explore overlooked deductions that can help lower your tax bill and speak to your tax preparer to learn what deductions you can claim. While most people are aware of popular deductions like mortgage interest and charitable contributions, several lesser-known deduction categories may also help you save:
Child and Dependent Care
Did you pay for childcare while working or job hunting? If so, you likely meet the criteria. Typically, your child must be 12 or younger and considered your dependent. This credit also applies if you’re paying someone to care for a spouse or dependent (regardless of their age) if they are incapable of self-care. In most instances, you’ll need to acquire the care provider’s social security number or taxpayer identification number and include it on your return.
State Sales Tax
If you’ve made significant purchases like a vehicle or boat, you may be able to deduct state sales tax on your federal return.
Job Searching
Hunting for a new job? Related expenses may be tax-deductible. Costs such as resume preparation, travel expenses for job interviews, and even fees paid to employment agencies can be claimed as deductions. While there are limitations and criteria to meet, exploring this deduction can ease the financial burden that accompanies unemployment.
Medical Expenses & Health Savings Accounts (HSAs)
In addition to typical healthcare expenses, like copays and deductibles, additional healthcare expenses may be deductions, including:
- travel expenses to and from appointments
- medically justified home improvements
- alternative treatments
Contributions made to your HSA are also eligible for tax deductions. Not only do the funds in your account grow tax-free when used for qualified healthcare expenses, but your contributions can also help lower your overall tax liability.
Student Loan Interest Paid by Others
There are instances where parents or others contribute to the repayment of a student loan. In these cases, if the individual is not claimed as a dependent on someone else’s tax return—and is legally obligated to repay the loan—they can still benefit from the tax deduction for the interest paid by others.
Home Office
The IRS allows taxpayers to claim a portion of their home-related expenses, such as mortgage interest, property taxes, utilities, and even a percentage of rent. The deduction is calculated based on the percentage of the home used for business, offering a practical way for self-employed individuals and remote workers to recoup some of the expenses incurred while conducting business from the comfort of their homes.
Educational Expenses
Whether you’re enhancing your skills for your current job or investing in a new career path, some educational deductions can maximize your tax savings and help ease the financial strain. The Lifetime Learning Credit and the American Opportunity Credit are two valuable options. These credits cover qualified education expenses, including tuition, fees, and course materials.
Energy-Efficient Home Improvements
If you’ve invested in energy-efficient upgrades for your home, such as solar panels, energy-efficient windows, or a new HVAC system, you may be eligible for tax credits. The Residential Renewable Energy Tax Credit and the Non-Business Energy Property Tax Credit can provide substantial savings. Not only do these improvements help the planet, but they can also boost your tax refund.
Ready to check taxes off your list? The IRS offers free filing options for those who qualify. And as your financial home, San Antonio Citizens Federal Credit Union also provides discounts on services from H&R Block and Intuit turbotax.
GreenPath Financial Wellness and San Antonio Citizens Federal Credit Union do not provide legal or tax advice. This information is intended for general guidelines only.
This article is shared by our partners at GreenPath Financial Wellness, a trusted national non-profit.