Tax credits can be claimed whether you use the standard deduction or the itemized deduction. The most populars include the child tax credit, the earned income tax credit and the American Opportunity tax credit.
But, those just mentioned are just a some possibilities for tax cuts available to US citizens.
Here are five tax cuts that you may not have previously noticed:
1. Charitable work deductions
If you worked as a volunteer for a charitable organization in 2018 and drove there, you can deduct the cost of parking, toll rates and part of the gasoline consumed (up to 14 cents per mile).
Also, you can deduct up to $ 250 dollars for supplies that you have purchased for the organization, such as soup for a soup kitchen for example, as long as you have kept the bills or receipts.
If you want to deduct more than $ 250, you require documentation from the charity organization.
2. Gambling loss deduction
If your trip to Las Vegas or Atlantic City in 2018 left you penniless, you can recover some of those losses when tax season approaches.
In order to do it, include losses on bets as tax deductions, as long as you opt for the itemized deduction.
You can also include money losses in casinos or racetracks, as well as losses playing Bingo, Lottery or raffle tickets, but only if the ticket was a loser. Another condition to take advantage of this deduction is that you can not deduct an amount greater than the earnings you claimed as income.
3. Deduction of salary payment for being part of a jury
If you were chosen as a jury member, your employer can offer you a temporary payment or a paid leave, and the court can pay you for your time – usually between $ 10 and $ 30 a day. In both cases, the money you receive is accounted as taxable income.
However, some employers require employees to pay their jury duty. If that is the case, you should still claim the payment as part of your income, but on your tax return you can claim it as a deduction, resulting in a zero net profit.
4. Guard dog deduction
Believe it or not, the IRS may consider your pet’s medical, training or feeding expenses as a business expense. If you take your dogs to work and you can show that they are required to be on the site (even protecting your business inventory), you can deduct the cost of dog care.
Your chances to take advantage of this deduction can be improved if the dog is of a race that would require the classic “beware of the dog” sign.
Similarly, if you have a service pet, such as a guide dog for a blind person, or a companion dog for people with disabilities, you can claim it on your tax return as an itemized deduction.
You include it as a medical expense in schedule A, being able to deduct all the costs of purchase, maintenance, food and the veterinarian.
5. Savings account for retirement credit
Saver’s Credit allows low- to moderate-income taxpayers who save for retirement to reduce the amount of taxes up to $ 1,000 or $ 2,000 if they are married and file a joint tax return.
To qualify for this credit, you must meet three requirements: You are at least 18 years old, you are not a full-time student, and you are not claimed as a dependent on another person’s tax return.
In addition, your adjusted gross income (AGI) must also be less than $ 31,500 if you declare as single, and less than $ 63,000 if you declare jointly.
Depending on your income, you can claim a credit equivalent to 50%, 20% or 10% of the first $2,000 in contributions to your retirement account or to the Achieving a Better Life Experience (ABLE) account, which is a savings account with tax advantages for people with disabilities and their families.
There are hundreds of reductions available
There are hundreds of tax reductions available to US citizens, either in the form of deductions, which decrease the amount of your taxable income, and tax credits, which reduce the total amount owed to the IRS.
If you want to minimize the amount of taxes you want to pay to the IRS, contact us, we are Global Tax, the largest non-franchised tax and accounting practice in the Washington DC metropolitan area. We have more than 20 years of existence and we are the company of choice for tax preparation of the Hispanic community.
Do not hesitate, contact us to request an appointment and give you the best strategies in tax planning, relieving you of the heavy burden and stress of making your statement properly, paying the least amount possible.