11 Unknown tax breaks that can boost your savings each year

An organized tax filer is always interested for saving more on tax than the previous year since it is probably the best way to reduce tax burden. So, its always a clever initiative to learn some strategies to save money on taxes. Make sure to formulate a documentation of your total income in advance to handle your tax situation in a better way. Once you manage every possible tax deduction opportunity, you can use the tax credit to pay off your other financial obligations as well.

11 Tax deduction to save more money at tax time

If you are not into a complicated tax situation, then it is better to report in the right and organized way in order to get better tax breaks. So, here are the 11 unnoticed tax breaks that will allow you to save money on taxes each year.

  1. Get earned income tax credit

If you lost your job last year or took a huge pay cut, it might lessen your AGI or adjusted gross income to such a level that it’ll make you eligible for the EITC or Earned Income Tax Credit. EITC is a repayable tax credit, which implies that when you’re obliged to pay less in income tax than your entitled credit, you’ll not only be required to pay more tax, but also obtain a compensation for the difference.

  1. Get advantage of child care costs

Parents can get tax benefits. This includes child care costs and child tax credit. Remember, alimony payments are also deductible. The benefit amount would be up to $1,000 for each child under the age of 17. If you’re saving money for your child’s education, then you can eligible for tax deduction.

  1. Make charitable contribution

Charitable contribution is one of the popular ways to save money on taxes. This is also a tax deductible option. One can receive up to $13,000 without paying taxes. So, you can donate a used car, money, assets or anything to your favorite charity. Don’t forget to keep the receipts because the IRS may ask you for the documents for all charitable contributions at the time of audit.

  1. Get deduction on mortgage payments

The costs related to mortgage payment can help you get some tax deductions. The interest you pay on your mortgage is tax deductible. Your lender is supposed to send you a Form 1098 with the amount you have paid toward the interest and the deductible amount. If you have made an extra mortgage payment at the end of last year, check if the interest payment was counted.

  1. Go green to get more tax break

According to The federal Government, those who make their homes  more green. For instance installing insulation, new windows, doors, advanced cooling and heating systems are eligible for tax breaks. Homeowner can save on tax by installing solar panels in home.

  1. Take advantage of medical expenses

You can get tax deduction on some medical supplies such as acupuncture, bandage, breast pumps.

  1. Get tax breaks on retirement savings

The IRS also takes into account of other assets that you have such as retirement saving accounts. IRA savings contribution credit is mainly for low-incomes and moderate taxpayers. This way they can save money on taxes. For instance, you can get a tax breaks  up to 50% of the first $2,000 invest in to your retirement account or an IRA (traditional or Roth).

  1. Claim deduction on real estate taxes

If a part of your mortgage payment includes an escrow amount which is used to pay your annual real estate taxes, and the Form 1098 that you get from the lender will let you know the deduction amount. There is also a tax deduction opportunity for you if the state or the county you live in charges a personal property tax.

  1. Start thinking according to your income

It is mainly your income on which the IRS will tax you. So start thinking on the basis of your income. If you’re an independent contractor, the company you have worked with is supposed to send you a form showing your gross earnings. If you’re self-employed, you will have to track all of the receipts and documentation for all kinds of business-related expenses and your income.

  1. Get deduction on job hunting

If you searching for a job this year, then you’re probably eligible to get tax breaks. Remember, the job you’re searching for should be in the same type of work as your current job.You can get itemized deduction. Some qualifying expenses are conveyance expenses (mileage @ 56 cents per mile,) cost of parking, tolls fees, postal charge,food costs and lodging (in case of overnight search). Make sure this is not your first job you’re searching for.Because expenses are not deductible on first job search.

  1. Consult with a CPA (certified public accountant)

Only an experienced and efficient CPA can tell you where to save money on taxes. They are well aware of tax laws and every tax saving opportunity. If your tax situation is complicated and  you’re too inexperienced to handle it, then you should consult with a CPA. A CPA can charge the fees according to his/her expertise and the location.

Other tax deductible options

  • Student loan interest paid by your parents.
  • Education expenses
  • State sales tax
  • Deduction on baggages
  • Dental care expenses
  • Adoption credit
  • Moving expenses
  • Bad investments

Final words

Remember, the IRS can  track you on the basis of your Social Security Number. So file the returns along with the SSN and also keep the ID numbers of the dependents (starting from your elderly parents to infants). Also you need to keep the tax identification number of the nanny. You may need it if you file for the child care credit. If you miss the SSN for any of the persons listed, then the blunder will cost you dearly.