The information in this article is up to date for tax year 2023 (returns filed in 2024).
Do you want to save money on your 2023 tax return? Well, then don’t miss out on valuable tax deductions. Using tax software to prepare your return will make life a lot easier, especially now that it’s crunch time. ezTaxReturn can help you find last-minute deductions you may have overlooked and help you claim them.
Here are some last-minute tax deductions you don’t want to miss.
Medical and dental expense deduction
If you itemize, the IRS lets you deduct a portion of your medical and dental expenses on your tax return, so keep your receipts. The expenses must be related to the diagnosis, cure, treatment or prevention of a disease. You can include things like the cost of eye exams, hearing aids, in vitro fertilization, therapy and more.
For tax year 2023, you can deduct any expenses for you, your spouse and dependents that are more than 7.5% of your adjusted gross income. If you have medical bills that weren’t covered by insurance, ezTaxReturn can help you claim the deduction and lower your tax bill.
IRA deduction
The contributions you make to a traditional individual retirement account (IRA) are often deductible. However, your deduction may be limited if:
- You or your spouse are covered by a retirement plan at work
- Your modified adjusted gross income (MAGI) exceeds the annual limits
Act fast because you only have until April 15, 2024 to make 2023 IRA contributions. The maximum you can contribute is $6,500 ($7,500 if you are aged 50 plus). These annual limits are for combined contributions. So if you have both a traditional IRA and a Roth IRA, you can’t contribute more than $6,500 across both accounts for the year.
Student loan interest deduction
Federal student loans payments with interest resumed in September 2023. If you made student loan payments for you, your spouse or your dependent in 2023, up to $2,500 of the interest you paid is deductible. Best of all, you don’t need to itemize to claim the deduction. Make sure you receive a 1098-E, or student loan interest statement, from your lender to report on your tax return.
To qualify for the full deduction, borrowers must make less than $75,000. Those who earn up to $90,000 in income can claim a partial deduction.
Read more: Tax Tips for Students
Educator expense deduction
Educators can deduct up to $300 of out-of-pocket classroom expenses on their federal tax return. If you and your spouse are both educators and you file a joint tax return, the deduction limit doubles to $600.
Educators can deduct the cost of professional development courses, books, supplies and computer equipment. You can also include items bought to prevent you and your students from spreading COVID-19 around the classroom. For example, face masks, hand sanitizer, disposable gloves, disinfectant and other items recommended by the Centers for Disease Control and Prevention (CDC).
To qualify for the educator expense deduction, you must
- Be a K-12 teacher, principal, counselor, instructor, or aide
- Work for at least 900 hours a school year
- Work in in a school that provides elementary or secondary education as determined under state law
Be sure to keep track of what you bought and how much you paid, so you can deduct it on your taxes.
Mortgage interest deduction
Paying your mortgage can help you save money on your taxes. Homeowners who itemize can deduct the interest paid on mortgages up to $750,000 ($375,000 for married couples filing separate) for homes purchased after 2017. If you purchased your home before December 15, 2017, the cap is $1 million ($500,000 if married filing separately).
The loan must be used to buy, build or significantly improve your main or second home. By now, your mortgage lender should’ve mailed you a Form 1098 detailing how much you paid in mortgage interest and points during 2023. ezTaxReturn can walk you through the steps of claiming your deduction.
Charitable contribution deduction
Did you know that donating to your favorite charity can reduce your taxable income? That’s right! Doing a good deed for someone else can be beneficial for you too. You can deduct money or property given to:
- Charities like Boys & Girls Clubs of America, Goodwill, American Red Cross, United Way, Salvation Army, CARE, etc.
- Nonprofit organizations that maintain public parks
- Nonprofit schools, hospitals, and museums
- Churches, mosques, synagogues, temples, and other religious organizations
- Volunteer fire companies
Keep track of your donations, no matter how big or small the amount. Hold on to any receipts, bank statements or credit card statements that show the organizations name, the amount you donated and the date. Donations of $250 or more also require you to get a written letter from the charity. You must itemize to claim your charitable contributions.
Home office deduction
Home office expenses are deductible, but only for those who are self-employed. Your home office must also meet certain standards to qualify. For instance, the office must be regularly and exclusively used for business purposes. If the room serves as a part-time guest room, craft room or play area for your kids, you cannot claim the deduction. The rules also state that the space must be the main place where you meet with clients. Using the simplified method, you can deduct $5 per square foot of your home office up to 300 square feet, or $1,500.
File your taxes now with ezTaxReturn. We ask simple questions to determine which deductions you qualify for and complete all the proper forms and calculations. 100% accuracy, guaranteed. Start now.
The articles and content published on this blog are provided for informational purposes only. The information presented is not intended to be, and should not be taken as, legal, financial, or professional advice. Readers are advised to seek appropriate professional guidance and conduct their own due diligence before making any decisions based on the information provided.
