You want a bigger tax refund?

These deductions and tax credits can help with that

Author

Neyra OperationtheHustle
February 28, 2024

This time of year can be very exciting if you usually get a refund, or slightly terrifying if you generally owe when you file. In either case, no one wants to pay more than they have to when it comes to taxes! Here are some ways you can lower your taxes even if you don’t have a business!

Do you need help with tax filing? Unfortunately, I’m not taking any tax prep clients this year. But, since so many of you have reached out, my friend Mercedes agreed to take on some of you as clients. There are 3 types of people licensed to practice tax - lawyers, CPAs, and EAs - she is an EA (Enrolled Agent). We met years ago in the Master of Taxation program at GSU and she’s had her own firm since then. I’ve sent my family to her for years and if I was going to have someone do my taxes for me, it would be her. If you’re interested in working with her, you can click here to get in touch. Make sure you let her know I sent you so you have a chance of getting in.

Lets start with deductions 

Remember, deductions lower the amount of money you get taxed on - as opposed to tax credits which lower the amount of tax you owe. I made a video explaining the formula for how income taxes work and where you will see the deductions and tax credits - you can watch that here.

Above the line deductions

  • Student loan interest

  • Health savings account deduction

  • Educator expenses (teacher expenses)

  • Traditional IRA contributions (subject to income limitations)

  • Alimony payments (subject to restriction on timing of divorce agreement)

  • One half self employment taxes

  • Self employed retirement

  • Military moving expenses

Standard deductions (2023)

  • Single and married filing separately - $13,850

  • Married filing joint - $27,700

  • Head of household - $20,800

Itemized tax deductions can include:

  • Medical & dental expenses

  • Taxes - state & local taxes, property taxes, sales taxes, and real estate taxes

  • Home mortgage interest

  • Charitable contributions

  • Casualty & theft losses - from a federally declared disaster area

  • Other - gambling losses, casualty & theft losses of certain income-producing property, certain unrecovered investment in a pension, and more.

Tax Credits

  • Earned income tax credit

  • Child tax credit

  • Child and dependent Care tax credit

  • American opportunity tax credit

  • Lifetime learning tax credit

  • Saver’s credit

  • Clean vehicle tax credit (EV)

  • Home energy

  • Premium tax credit

These are all pieces that make up your tax return. Generally it looks like this, you start with income (from all sources) and you can subtract the above the line deductions. From there, you subtract either the standard or itemized deductions (generally whichever is bigger) and calculate your tax due after those deductions. Lastly, you lower your tax by any tax credits you have available to you. You can watch my TikTok walk through of this here.

You may still be able to get an additional deduction like for IRA or HSA contributions but it’s important to know is that it’s too late for the vast majority of these deductions and tax credits for 2023. It’s the perfect time to start looking into these for 2024 though! Remember, while having a good tax preparer is important - their job to to make sure the tax return reflects what happened throughout the year. They can’t just pull tax deductions and credits out of a hat that you aren’t entitled to. There is plenty of time to take action for 2024 and maximize the deductions and tax credits mentioned here. I know I didn’t go into a ton of detail, but this email would be 30-40 pages if I did. You can find details for deductions at this IRS site and you can find details for tax credits at this IRS site. You can also do a simple search for any of the deductions or credits mentioned here.

I hope you found this helpful, see you next week.

Neyra

Please remember that while I am a CPA now, I am not your CPA. Please consult a licensed professional on any financial, tax, or business decision you contemplate.