Friday Feb 03, 2023

Tax Write-Offs You Shouldn’t Overlook – MSN Money

npressfetimg-2049.png





© (Getty Images)
Young man sitting in coffee shop and working

With frequent tax law changes – and life changes – over the past two years, it’s easy to overlook tax breaks that could be worth hundreds of dollars or more.

Some of these tax credits and deductions may be new to you. You may have heard of others but had no idea that you qualify. Several key tax breaks were expanded significantly in 2021, and you may now be eligible for the first time or qualify for a bigger break. If your income dropped in 2021 or you retired, started a new job, did some freelance work, took continuing education classes, paid for child care, or had out-of-pocket medical expenses, it’s a good time to see if you’re eligible for some extra tax breaks. Here are some frequently overlooked tax credits and deductions, and how to make the most of them when filing your 2021 taxes.

  • Bigger tax break for summer camp.
  • Tax credit for non-degree classes at higher income levels.
  • Bonus credit for saving.
  • Tax-deductible savings for your side gig.
  • Overlooked tax breaks for freelancers and the self-employed.
  • Home office deduction for freelancers.
  • Tax-deductible HSA contributions when you get your own insurance.
  • Medical-related travel, long-term care premiums and other expenses.
  • Charitable contributions for nonitemizers.
  • Energy-related home and car tax credits.

Bigger Tax Break for Summer Camp

You may be familiar with the child and dependent care tax credit, and now it’s even better. “There were big changes in 2021,” says Mark Steber, chief tax information officer for Jackson Hewitt. The credit was expanded significantly and can now be worth up to $4,000 for one child, or $8,000 if you have two or more children. You may not realize how many expenses can qualify: You can count the cost of day care, preschool, a nanny, before-school and after-school care, and even the cost of summer day camp for children under 13 while you and your spouse work or look for work (overnight camps don’t count).

The credit is now worth as much as 50% of up to $8,000 in eligible child care expenses for one child under 13, or up to $16,000 in expenses for two or more children. Also, the income level to qualify for the largest credit was bumped way up. Now, you can take the credit for up to 50% of your eligible expenses if your adjusted gross income in 2021 was $125,000 or less. The eligible percentage gradually decreases for higher income levels, and the credit disappears if your income was $438,000 or higher. For more information, see IRS Publication 503, Child and Dependent Care Expenses.

Tax Credit for Non-Degree Classes at Higher Income Levels

You don’t need to be a full-time student to get a tax break for college classes. You can claim the lifetime learning credit for undergraduate or graduate classes, certificate programs or continuing education classes at an eligible educational institution even if you aren’t working toward a degree. The credit is worth 20% of up to $10,000 in qualified expenses, with a maximum credit of $2,000 per tax return. “Qualified expenses are tuition, fees, course materials included in tuition, cost of books, computers, and software necessary for the course,” says Steber.

The income limit for qualifying …….

Source: https://www.msn.com/en-us/money/taxes/tax-write-offs-you-shouldnt-overlook/ar-AAUdrzv

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to Top