It is crucial to be aware of regularly forgotten tax deductions and credits that you may be missing now that tax season has arrived, and numerous changes to an already complex tax code are in place for tax returns. CPA in Scranton, Pennsylvania, can help with your tax-related issues.
Here Are Tax Benefits You Should Take Advantage Of
- The 1098T Form for College Students
One of the most common tax breaks people need to take advantage of is the deduction for higher education costs. This is mainly because the 1098T form required to receive these credits is only available on the student’s specific student portal on the college website and is often forgotten due to the extra steps required to download.
- Budgeting for the Job Hunt
All of your outlays for things like gas, meals, a place to stay, copies of your résumé, cover letter, and business cards can be deducted, as can the fees charged by employment agencies. However, this deduction will only apply if the new job you are seeking is in the same field as your previous one. You are not eligible for this reduction if this is your first employment or seeking a career change.
- You are a resident of a tax-free state.
If you live in a tax-free state like Florida but still want to itemize your deductions, you can deduct either state income or sales taxes. Residents of tax-free states should select the state sales tax option. If you do not live in a tax-free state, you should go with the choice that gives you the best financial results.
- You are a telecommuter.
Even if working from home is becoming more widespread, many people still need to include it as an income source for fear of being audited. Either you itemize your home office expenses or use the “safe harbor” option, which allows you to multiply the square footage of your home office by $5.
- You Have A Home Office
Even if working from home is becoming more widespread, many people still need to include it as an income source for fear of being audited. Either you itemize your home office expenses or use the “safe harbor” option, which allows you to multiply the square footage of your home office by $5 (up to a maximum of $1,500).
- You upgraded your home and then sold it.
The capital gains tax savings from this nugget might be in the thousands. If you have renovated your home that has raised its value, you can deduct that amount from your taxable gain when you sell the property.
- Financial Assets
You still need to report dividends from stocks and bonds even if you did not receive any cash from them. Individuals also frequently need to report income earned from the sale of securities and subsequent reinvestment. They result in profits and losses, which might reduce a person’s taxable income.