Make the Most of Your Tax Return
The average individual taxpayer in the US pays 22% of their income in taxes. So, the question is, how can you increase your take home pay and reduce your taxes? Let’s review some of the basics. One way to make the most of your tax return is to itemize your deductions, on Schedule A of the IRS 1040 form.
Common Itemized Deductions
401K, Roth IRA, & IRA Contributions
Capital Stock Losses
State and Local Income Taxes
Student Loan Interest
Medical and Dental Expenses
Health Insurance Premiums
Under Medical Expenses, the IRS is allowing you to deduct the purchase of personal protective equipment, (masks, hand sanitizer and sanitizing wipes) for the primary purpose of preventing the spread of coronavirus.
Charitable Deductions, with a qualifying charitable organization can be deducted, up to 60% of your adjusted gross income (AGI).
Talk to your payroll office to review and adjust next year’s anticipated filing status on your W-4, that could bring you a few hundred extra dollars a month. This is especially important if you have a major change in your life, such as getting married, having a child, or buying a home.
Services such as TurboTax, eFile and H&R Block offer plenty of free information on making the most of your tax return.
For the latest information about developments related to Schedule A (Form 1040) and its instructions, go to IRS.gov/ScheduleA