Ways to Earn More Money from Tax Deductions

Paying taxes can really be a pain and take a good chunk out of your overall earnings. However, there are ways you can deduct some money from your taxes, if you are eligible for certain tax credits.

Even though tax deductions can be great, try to aim for tax credits as they can be more beneficial in the long run. Read more to some ways you can lower your taxes next time you file them:

Energy-efficient upgrades

If you installed energy-efficient upgrades to your house, like better insulation, you could be eligible for a 10% tax credit that could amount up to $500 over a lifetime.

Take out old receipts, bills and tax document from last year

Show these to your accountant and see if you are eligible for any new programs the government is offering. For instance, there is a credit called the American Opportunity credit and a deduction for college tuition, particularly if you have applied for financial aid.

Fund a Roth IRA or Coverdell education savings account

This may not be well known but you can fund these types of accounts, you can receive tax-free income. This is great because it’s always good to have some income saved away in a tax-free account.

Medical Expenses Deduction

If you spent a good deal on medical expenses, this can serve as a deduction from your taxes. The costs must exceed 7.5% of your AGI and can exceed 10% if you are 65 years or older. This can be great if you have a pre-existing condition or some kind of disability. Older citizens will also spend much more on hospital bills so this can also greatly benefit them.

Charity Donations Deduction

If you have recently donated to charity, you will have to file a Form 8283 and this deduction  can save you about $500, which is pretty good.