Tax season isn’t just about paying the government; it’s also about maximizing your tax benefits. At Build Em Up Bookkeeping we’re here to help explore some common, yet sometimes overlooked, tax credits and deductions you might be eligible for.
Tax Credits:
Tax credits directly reduce the amount of tax you owe. Here are some noteworthy examples:
- Earned Income Tax Credit (EITC): This valuable credit is available to low- and moderate-income workers and families. The credit amount varies depending on your income, filing status, and the number of qualifying children you have.
- Child Tax Credit: This credit helps offset the cost of raising children. Similar to the EITC, the credit amount is based on income, filing status, and the number of qualifying children.
- Education Credits: Credits are available for certain education expenses, like tuition and fees paid for higher education. Additionally, there’s a Lifetime Learning Credit for ongoing educational pursuits.
- Retirement Savings Credit: This credit incentivizes saving for retirement by offering a tax break for contributions to IRAs, especially for lower- and middle-income earners.
Tax Deductions:
Tax deductions allow you to reduce your taxable income by subtracting certain expenses from your gross income. Here are some common deductions to consider:
- Standard Deduction vs. Itemized Deductions: The standard deduction is a fixed dollar amount automatically deducted from your taxable income. Itemized deductions allow you to deduct specific expenses if they exceed the standard deduction amount. Common itemized deductions include charitable donations, mortgage interest, state and local taxes paid (up to a certain limit), and medical expenses exceeding a specific percentage of your income.
- Student Loan Interest: If you’re repaying student loans, you might be eligible to deduct a portion of the interest paid each year.
- Work-Related Expenses: Certain business-related expenses, such as unreimbursed travel costs, home office expenses (if you meet specific criteria), and professional development costs might be deductible.
Remember:
This is not an exhaustive list, and eligibility for these credits and deductions can vary depending on your specific circumstances. It’s always best to consult a tax professional and at Build Em Up Bookkeeping, we’re here to help to determine which deductions and credits apply to you. By claiming the appropriate credits and deductions, you can significantly reduce your tax burden and maximize your tax return.
Build Em Up Bookkeeping is Fremont County’s go to virtual tax preparer. Established in 2010 and virtual since 2016, Build Em Up Bookkeeping has the experience to serve all your tax needs. Contact Build Em Up Bookkeeping in Riverton today and experience the convenience and peace of mind that comes with having your taxes handled by a professional. Call 307-207-2772 or visit their website here to learn more and schedule your free consultation.