Tax season is approaching, and you still have time to take advantage of your deductible expenses and dozens of tax credits to pay less and dream more.
There are many kinds of deductible expenses that the Internal Revenue Service (IRS) recognizes and that will allow you not only to recover part of your money in refunds but also to keep your annual tax rates in a reasonable category. It’s also a good idea to take advantage of tax credits offered by the IRS to improve your financial situation and continue to grow.
In order to claim deductible expenses, it is essential that you keep all the vouchers and receipts of your expenses throughout the fiscal year. At Futuro Tax we can help you manage all your taxes and keep all your important papers up to date. Do not waste any more time, and write to us to know more.
Tax deductible expenses in 2021
Education: There are two tax credits currently in force that allow you to cover educational expenses. One of them is the American Opportunity Tax Credit (AOTC), which gives you up to $2,500 for expenses related to your education during the first four years of college.
The other tax credit intended to help with educational expenses is the Lifetime Learning Credit, which allows you to receive a maximum of $2,000 for educational expenses each tax year. This credit is easy to claim and you can request it even if you are not doing a long university career.
Child and dependent care: The Child and Dependent Care Credit can be claimed if your children are under the age of 13 and you took them to special care centers, nurseries, or day camps. You can get between $8,000 and $16,000 a year with this credit to cover eligible expenses related to child and dependent care, and the best part is that it is fully reimbursable.
Also, if you are responsible for a person who qualifies as a dependent for the IRS, it is convenient to take advantage of the Credit for other dependents. With this tax credit you can get up to $500 for each non-child dependent in your care.
Health plan and medical expenses: If you are self-employed, there are ways to claim your deductible expenses linked to health plan premiums and other eligible payments. Among other things, the miles traveled for medical reasons, the purchase cost of exercise equipment, or even the maintenance of facilities such as spas or swimming pools qualify as long as you have an associated medical recommendation.
Charitable donations: Donations to organizations or charities recognized by the IRS are tax deductible. Although you can’t deduct your volunteer work, you can claim miles traveled, parking costs, or tolls as deductible expenses. Furthermore, under the Ley CARES, for the year 2021 you can deduct up to $600 for donations annually with the standard deduction.
Home office and expenses related to working from home: If you use your home exclusively and regularly as a workplace, you can obtain a special deduction for home office that will allow you to claim as deductible expenses a percentage of utilities, rental costs, mortgage interest and other costs. However, this only applies if you are an independent contractor or self-employed.
Transportation expenses and mileage: If you use a personal vehicle for your work, and you are self-employed, you can claim as deductible expenses the costs per mile at a rate of 56 cents for 2021.
Do you still have doubts about how to deduct expenses from your taxes and improve your refund? Don’t worry, at Futuro Tax we help you manage your taxes in the simplest and most efficient way with our state-of-the-art tax preparation tools available completely in Spanish.
In addition, we have a team of professional preparers ready to help you solve all your doubts and problems in the best way. Don’t hesitate anymore!
In the meantime, we invite you to continue reading our blog to keep up to date with all the news that affects your taxes.