Common Tax Deductions

No one enjoys paying taxes, but many people don’t realize that there are actually quite a few things that can be done in order to lesson the blow each tax season. Tax deductions allow you to pay less than you would if you didn’t otherwise claim them, and often go overlooked by those who are new to doing their taxes on their own. 

Fortunately, there are plenty of common tax deductions that the common person can take advantage of, many of which could have a rather large impact on how much you end up owing when it comes time to pay.

Home Mortgage Interest

In today’s difficult economy, paying a mortgage can be rather difficult, especially if one is not in good financial shape. This is made especially difficult if one has to pay a great deal of interest on their mortgage, which can add up quite a bit over the course of a year. 

Fortunately, home mortgage interest can be written off as a tax deduction each year. There are plenty of gray areas that come along with claiming your mortgage interest as a deduction, which makes it important to work with a tax professional if you intend to do so. 

Still, you may stand to save quite a bit of money if you take this deduction, especially if the interest rates on your mortgage are high.

Donations

Many people make donations to charities and other organizations throughout the year without realizing that these can often be written off as deductions on your taxes. This makes making donations quite lucrative, especially if you’ve been doing so without taking the deduction. 

Writing off charitable deductions should be done under the supervision of a financial advisor, however, as there are limits on what can be written off, and some donations do not count towards deductions. If you make donations on a regular basis, however, you can benefit greatly from taking this deduction.

Medical and Dental Expenses

Medical expenses are extremely difficult to pay for those who are not financially stable, and can often cripple one’s finances in no time at all. Still, these expenses are often paid out of necessity, with those needing the work having little to no option in front of them. 

Fortunately, many medical and dental expenses can be claimed as deductions on your taxes, lessening the blow to some extent. This is especially true if you own a small business and have to pay for your own health insurance, which can be extremely expensive. 

Like other deductions, navigating the world of medical deductions is difficult, and is best done with the help of finance professionals. Be sure to keep track of all of your expenses throughout the year in case an audit is to occur, which you should always strive to be prepared for.

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