15 Common Tax Deductions and Credits
For the past two weeks, we’ve covered tax deductions and credits; their similarities and differences. This week, we want to share the 15 most common options (excluding the standard deduction) in a little more detail to help you better understand what you may be eligible for. Here are a few to get started:
1) Earned Income Tax Credit: this is based on your income, marital status, and number of children. This is also one of the few credits that can result in a refund.
2) American Opportunity Tax Credit: this credit, also based on income, is available if you had undergrad education expenses and is available for four years.
3) Student Loan Interest Deduction: the interest you pay on your student loans is deductible if your income is below a certain amount. It’s not an itemized deduction, it’s taken above-the-line, which means you subtract the interest you paid to lower your taxable income. If you qualify, you can take both the student loan interest deduction and the standard deduction.
4) Mortgage Interest Deduction: the ability to deduct the interest you pay on a mortgage can help make home ownership more affordable. This is an itemized deduction, meaning you can’t take both the standard deduction and this deduction.
For the complete list, read our full article here.