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Common Tax Exemptions You May Not Know About

Common Tax Exemptions You May Not Know About

By on Nov 24, 2015 in Filing Taxes, IRS, Tax Tips | 0 comments

Common Tax Exemptions You May Not Know AboutWhen tax season rolls around, emotions can run high. Even if a taxpayer doesn’t necessarily owe taxes, the process of filing them can sometimes take a toll. The anxiety of having to engage with the Internal Revenue Service (IRS) has the potential to drive anybody into a mild bout of anxiety.

Well, here’s something to alleviate some of that repressed worriment: There are ways to get more money from the IRS! 

The Most Well-Known Deduction:Dependency Exemption 

Almost everybody knows about receiving a personal exemption for dependents. Each dependent claimed can be worth up to a $4,000 exemption. That’s a generous amount for taxpayers and some are more than satisfied with this exemption not realizing that there’s more money to be had!

Other Common Exemptions 

There are many pop-up tax preparations businesses that are glad to file someone’s taxes without taking a few extra steps to ensure that the filer is getting the most out of the services they are paying the tax preparer to do. Success Tax Relief doesn’t do this. That’s why we provide our clients with useful information like this list of additional exemptions that taxpayers may not have known they could claim: 

  • Home Office – Well, it could be argued that the home office exemption is as about as common as the dependency exemption. However, because there are certain guidelines to meet in order to claim this one, oftentimes tax preparers will not always take the extra steps to determine whether or not one qualifies. 
  • Education Expenses–Students enrolled in a college or university working toward a degree can qualify for certain deductions and credits. 

Credits 

The IRS has formulated two ways for students to receive a tax credit withThe American Opportunity Tax Credit and the Lifetime Learning Credit. Students can only claim one of these credits.

  • American Opportunity Tax Credit (AOTC) – A student is eligible to receive an annual credit of approximately $2,500 for four years of higher learning.
  • Lifetime Learning Credit – Here, a student is eligible to receive up to $2,000 every tax return. Unlike the AOTC, there is no limited amount of years that this tax credit can be earned as long as the student qualifies.

Deductions 

Students can basically claim most of their college expenses on their tax filing. This includes the following:

  • Tuition and books
  • Interest on school loans
  • Room and board
  • Commuting expenses           
  • Sales Tax – Depending on the state, most businesses are required by law to tax their merchandise. If taxpayers chose to collect all of their purchase receipts throughout an entire year, it would add up. This amount can be added to the existing amount of taxes paid that year. 
  • Job Searching – Money spent on paper resumes, postage, and mileage for interviews can all be deducted. 
  • Business Expenses – If you are required to wear a work uniform, you can deduct the annual expenses it takes for proper care and maintenance—ONLY IF the employer doesn’t do it. Mileage, parking, and toll road expense also apply. 
  • Donations – Charitable donations, whether it’s cash or gently used items to non-profit organizations can also be deducted. 
  • Medical Expenses – Any out-of-pocket medical expenses can be listed in itemized deductions. 
  • Job Relocations – New employees that have traveled a considerable amount of miles to relocate can count their moving expenses as a deduction as well.

What Else Don’t You Know about Tax Laws?

Our team at Success Tax Relief in LaPorte, Texas has extensive experience communicating with the IRS and helping clients better understand their tax laws. With 30 years of experience, we can help you get the most out of your tax filing. So call us today at 1-877-825-1179 to schedule a consultation or send us an inquiry online now!

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