5 Commonly Missed Tax Breaks

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The information in this article is up to date for tax year 2023 (returns filed in 2024).

Nobody likes leaving money on the table, but every year a number of people do because they overlook valuable tax breaks. Using DIY tax software like ezTaxReturn can help you get tax credits and deductions you didn’t even know existed. See which tax breaks people commonly miss, so you avoid making the same mistake.

Don’t forget all the charitable contributions you made last year.

It’s no secret that donating to charity can help lower your taxable income but one of the most commonly overlooked contributions are weekly church tithes.  Considering that most churches recommend tithing at least 10 percent of your salary, the savings can really add up.  When donating to your church or any other charity, be sure to keep good records including the name of the organization, donation date and the amount.  If you plan to donate more than $250 at once, you’ll also need a written acknowledgement from the organization.  Don’t forget that if you drove for charity, you can also deduct 14 cents per mile plus any fees paid for tolls and parking.  In order to take this deduction, you must itemize your return.

Reduce your tax liability by deducting your gambling losses.

Did your winning streak come to an end this year?  If so, we have some news that may make your losses a bit easier to swallow.  You can deduct any gambling losses that are less than your winnings as long as you itemize.  For example, if you won $350 but lost $500, you can deduct up to $350 of losses on your return.  As usual, be sure to hold on to receipts, tickets and any other documents that support your claims.

Low- and moderate-income workers can save big with the Earned Income Credit.

Even though the Earned Income Credit (EIC) has been around for over 40 years, many filers still overlook this valuable tax break. Historically, 1 in 5 eligible workers don’t claim the credit because they either don’t know it exists or don’t realize they qualify.  You could be letting up to $7,430 slip through your fingers. To claim the EIC, you must be between 25 and 64 years old and have earned income within a certain threshold. The credit amount you’ll receive depends on your filing status, earned income and number of children you have.  Taxpayers who don’t have kids can qualify for a smaller credit amount.  File your taxes online with ezTaxReturn and we’ll help you get the credits and deductions you deserve. We provide clear step-by-step guidance and guarantee 100% accurate calculations.

Eligible educators can deduct up to $300 of out-of-pocket classroom expenses.

Educators who use their own money to buy classroom materials can deduct up to $300 worth of unreimbursed expenses on their tax return.  Eligible expenses include books, supplies, computer equipment (including software and services) and other related materials.  To qualify, you must be a K-12^th grade teacher, instructor, counselor, principal or aide and work in a school at least 900 hours per academic year.  The best part is you don’t have to itemize your return to take this deduction.  Please note, if you and your spouse are both educators, you can deduct up to $600 total but neither party cannot exceed the $300 limit.

You can get a tax credit for saving.

Do you contribute to an IRA or employer-sponsored retirement plan during the year?  If so, the Saver’s Credit is another tax break you don’t want to overlook.  To be eligible, you must be 18 or older, out of school and not listed as a dependent on anyone’s tax return.  Depending on your adjusted gross income (AGI) and filing status, your credit may be worth 50, 20 or 10 percent of your contributions up to $2,000 ($4,000 if married filing jointly).

Credit Rate	Single, Married Filing Separately or Qualifying Widow(er)	Married Filing Jointly	Head of Household
50% of your contribution	$0 – $21,750	$0 – $43,500	$0 – $32,625
20% of your contribution	$21,751 – $23,750	$43,501- $47,500	$32,626 – $35,625
10% of your contribution	$23,751 – $36,500	$47,501 – $73,000	$35,626 – $54,750
0% of your contribution	$36,501 and up	$73,001 and up	$54,751 and up

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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.