Most Americans who file taxes go for the standard tax deductions which are based on your age, income and filing status. The actual deduction often changes from year to year. For 2014 the average tax return was $6200 for singles and married people who opted to file separately, and up to $12,400 for married people filing jointly. Yet some people choose to itemize or for whatever reasons are not eligible for the typical standard deductions. If you fall into this category you need to maximize every single advantage you have because every deduction matters when it comes to getting the best tax return possible.
If you itemize and reside in a state that has no income tax, namely Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming, then you can deduct your state tax. If you live in any other state you too have options, you can deduct either your state and local sales taxes, or you can opt to deduct your state and local income taxes. When choosing between the two you should of course choose whichever is greater. if you purchased some big goods such a new car, a wedding ring and engagement ring as well as say some home improvements the sales tax deduction could amount to be a significant amount of money saved. If you have any doubts as to what you would save by claiming your sales tax you can always make use of the IRS sales tax deduction at http://www.irs.gov/Individuals/Sales-Tax-Deduction-Calculator
Claiming dependents is an old deduction but there have been some significant changes to how dependents are classified. Of course children up to age 19 who are not in school may be claimed as well as children up to age 24 who are still in school. If your child is disabled you can claim them at any age, even 40 if they live with you still. Now you can also claim your parents if you are supporting them as well. This is often the case for those who live in the so called sandwich generation. You have to be providing your parents 50% or more of their financial needs to qualify for this deduction. If you do qualify for this deduction you might even be able to claim your parents medical care costs along with your own when you itemize. Did you know that the IRS allows dependent status and deductions for over 30 different types of relatives? Have a sister living with you who is handicapped? This too might be a deduction. These deductions can be either $1000 per person or $350 plus the dependents earned income, whichever is greater. If you are confused you can always check out Turbo Taxes cheat sheet at https://turbotax.intuit.com/tax-tools/tax-tips/Family/Rules-for-Claiming-a-Dependent-on-Your-Tax-Return/INF12139.html
If you are itemizing then you should really pay attention to medical care deductions. These are often times the most overlooked of all deductions. Did you know if you make a home improvement for medical reasons such as handicap access that this is a tax deduction? You can even write off the mileage back and forth to medical appointments for yourself, your children and any dependents you transport. Medical care providers do not report to the IRS what you paid in medical expenses so you should keep track of these expenses throughout the year and itemize these at tax time. Most medical expenses qualify for these deductions even hearing aide batteries, bandages, eye glasses, home health care expenses and more. Even home renovations that need to be made per a doctors order count. The cost to train a companion animal also qualifies.
While taking the standard deductions is no doubt the easiest method to do your taxes you could be missing out on big tax returns by not itemizing your tax deductions. For those who qualify and take the time to do so you could very well maximize your tax return. You should of course consult a qualified CPA to discuss weather or not this option is the best for you.
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