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From maximizing their tax credits to researching what happens when filing taxes late, Americans today are keen for opportunities to hang onto their income during tax season. For taxpayers looking to itemize, the list of potentially tax-deductible expenses is long—here are some that may be surprising.
It’s no secret that charitable gifts are generally income tax-deductible, but taxpayers may be able to claim more than just monetary donations to qualified charities and religious organizations. Taxpayers may be surprised to find that donated items might also be tax-deductible. That means taxpayers might be able to deduct the fair market value of things like clothing, shoes, furniture, household goods, and more.
Anyone seeking to invest in themselves through education should consider calculating their applicable deductions. For example, in 2022 taxpayers might be able to deduct up to $4000 annually for higher education tuition and fees for themselves, a spouse, or a dependent. Similarly, with the Lifetime Learning Credit, those engaged in training or continuing education might be able to take a tax credit of up to $2000 of their related expenses every year. The tuition and fees deduction and the Lifetime Learning Credit are subject to earnings phaseouts.
In addition to qualifying tuition and fees, student loan interest might also be deductible. Those paying back student loans might be able deduct up to $2500 in 2022 in student loan interest paid. Taxpayers looking to deduct student loan interest must meet specific criteria related to income level and filing status to qualify, so it’s important to check with a tax advisor.
From charitable gifts to student loan interest, some surprising things might be tax-deductible. While just a few examples, this list shows that tax deductions aren’t the sole purview of business owners. Even those who prefer to claim the standard deduction may be able to benefit from being aware of the breadth of deductions that may be claimed when tax season arrives. By staying mindful of potentially deductible line items, taxpayers itemizing their expenses may find unforeseen opportunities to reduce their liability this tax season.
Source: Northwestern Mutual
Contact: Don Klein, 1-800-323-7033
This publication is not intended as legal or tax advice. Financial Representatives do not render tax advice. Consult with a tax professional for tax advice that is specific to your situation.
