Last week, an article published by HuffPost featured Boundless Tax! Published on both HuffPost and Yahoo! News through a publishing partnership, this article focuses on confusion surrounding tax deductions and how exactly they work.
The tax deduction topic confuses many people. Our tax experts go into detail regarding the standard versus itemized deductions. We also describe how each can have its benefits and rewards when used properly. Many deductions are simply so uncommon, rarely are they utilized by taxpayers. As IRS-licensed Enrolled Agents, we know about these deductions and can help our clients take advantage of them come tax time.
Common Tax Deductions
- Charitable contributions
- State income tax
- Sales and local taxes
- Home office deduction
- Mileage expenses
- Medical expenses
- Retirement contributions
- Student loan interest
- Gambling losses
- Education credits
- Child and dependent care credit (CTC)
- Other dependents credit
- Earned Income Tax Credit (EITC)
Here is a small snippet:
On the other hand, if you think you qualified for more tax write-offs than the standard deduction is worth, you can choose to itemize your taxes instead. “Essentially, this means forgoing the standard deduction and using your actual expenses in certain pre-defined categories to push your deductions higher,” said Dane Janas, an IRS-licensed enrolled agent and the owner and CEO of Boundless Tax.
So how do you know which option is best? “If all of your deductible expenses combined — including things like mortgage interest, charitable contributions and other expenses — add up to more than the standard deduction, then it make sense to itemize,” said Andrea Coombes, a tax specialist for personal finance education site NerdWallet. On the other hand, if your deductible expenses add up to less than the standard deduction, you have to claim the standard deduction.
Boundless Tax thanks HuffPost & Yahoo! News for our feature!