10 Last-Minute Tax Deductions and Credits

(June 2024)

10 Last-Minute Tax Deductions and Credits

In This Article

Thinking about the last-minute tax deductions and credits that can save you a significant amount of money when it comes to paying your taxes? This is for you if you’re looking to lower your tax burden and maximize your savings. 

Whether you’re a homeowner, student, charitable contributor, or self-employed individual, these deductions and credits provide valuable opportunities to reduce your tax liability.

Imagine being able to offset some of your tax bill by making simple adjustments to your filing. From deducting charitable contributions and medical expenses to claiming education-related credits and deductions, these tax benefits offer a chance to lighten the load when facing tax season.

These deductions and credits are not just for the financially savvy; they’re for anyone who wants to make the most of their hard-earned money. So, take a moment to explore how you may benefit from these 10 last-minute tax deductions and credits. Believe it, it’s not as daunting as it may seem.

10 last-minute tax deductions and credits:

  1. Retirement Contributions
  2. Medical Expenses
  3. Education-related Credits and Deductions
  4. Homeownership Deductions
  5. Charitable Contributions
  6. State and Local Taxes
  7. Job Search Expenses
  8. Self-Employment Expenses
  9. Energy Efficiency Upgrades
  10. Adoption Expenses

Recap 

1.  Retirement Contributions 

If you put money into a traditional IRA or an employer-sponsored retirement plan, you may be able to qualify for a deduction. This means the amount you contributed can reduce your taxable income, providing a financial benefit. 

These are the opportunities to optimize your tax situation before year-end. For instance, making additional contributions to your retirement account or maximizing eligible expenses can lower your tax liability. It’s a strategic move to consider as the year concludes, ensuring you leverage available deductions and credits to enhance your overall financial position.

2.  Medical Expenses 

When it comes to medical expenses, you can deduct certain unreimbursed costs if it exceeds a specific percentage of your adjusted gross income. This includes expenses like health insurance premiums, qualifying medical and dental costs, and long-term care insurance. Essentially, if you spend a significant portion of your income on these medical expenses, you may be eligible for a deduction.

These are opportunities to reduce your taxable income or directly decrease the amount of tax you owe. It’s crucial to identify any available deductions or credits before filing your taxes. For instance, contributing to retirement accounts or making energy-efficient home improvements may qualify.

3.  Education-related Credits and Deductions 

When you cover educational expenses for yourself, your spouse, or dependents, tax benefits emerge, notably the American Opportunity Tax Credit and the Lifetime Learning Credit. These credits provide financial relief by offsetting the costs incurred through tuition and fees. 

The American Opportunity Tax Credit targets undergraduate education, offering up to $2,500 per eligible student, while the Lifetime Learning Credit caters to a broader range of educational pursuits. 

Deductions and credits can be maximized by reviewing eligible expenses and ensuring timely claims. 

4.  Homeownership Deductions 

In the realm of homeownership deductions, you benefit from deducting mortgage interest, property taxes, and expenses related to home improvements. When you pay mortgage interest, a portion is eligible for deduction, along with property taxes. 

These are opportunities to optimize your tax situation. Consider contributing to retirement accounts, making charitable donations, or leveraging education-related credits. These strategies can help reduce taxable income and increase your refund.

5.  Charitable Contributions 

When you donate to eligible charities, you can often deduct these contributions from your taxes. This includes cash, property, or out-of-pocket expenses linked to volunteer work. Recent legislation, like the CARES Act, allows a $300 deduction for charitable cash contributions on your taxes, even if you don’t itemize. Note that this deduction is separate from your standard deduction.

These are opportunities to reduce your taxable income or directly decrease your tax bill. Exploring these options before the tax deadline to enhance your financial standing.

6.  State and Local Taxes 

When it comes to state and local taxes, it’s crucial to understand your state’s regulations. You have the potential to reduce your federal taxable income by deducting state and local income taxes, or in some cases, sales taxes. 

This deduction hinges on your state’s laws, and the specifics vary. So, keep detailed records and stay informed about any changes in tax legislation. Stay vigilant for updates, as tax laws may evolve.

7.  Self-Employment Expenses 

In terms of self-employment expenses, you can deduct various business-related costs if you’re working for yourself. This includes items like office supplies and a portion of your home’s expenses if it serves as your business space. 

Additionally, certain travel costs related to your business activities are also deductible. Essentially, these deductions aim to alleviate the financial burden associated with running your own business.

Ensure you act promptly to capitalize on these opportunities and enhance your financial position. 

8.  Job Search Expenses 

In your job search, expenses like travel, resume creation, and agency fees may be tax-deductible when pursuing a role in the same field. This means that if you’re actively seeking employment, the costs incurred during this process can reduce your taxable income. 

For instance, if you travel for interviews or pay for professional resume services, these expenses may qualify for deduction. Keep detailed records of these costs to substantiate your claims during tax filing. 

Remember, this deduction applies when searching for a position within your current industry. When exploring last-minute tax deductions and credits, don’t overlook potential savings tied to job search expenditures.

It’s a way to ease financial burdens while advancing your career. Always consult with a tax professional for personalized advice tailored to your situation.

9.  Energy Efficiency Upgrades 

If you’ve recently enhanced your home with things like solar panels or energy-efficient windows, you may also qualify for specific tax credits. These credits essentially mean that you can receive deductions on your taxes, saving you money. 

It’s a government incentive for making environmentally friendly choices for your home. Consider these as valuable opportunities to reduce your taxable income and receive a refund.

In the context of energy efficiency, claiming these credits can be a smart move before the tax deadline, ensuring you benefit from available savings. Keep records of your improvements and consult with a tax professional to maximize your deductions. This not only supports sustainable choices but also puts money back in your pocket.

10.  Adoption Expenses 

Think of adoption expenses as a financial support system for those going through the adoption process. When you adopt, there are costs involved—like fees, legal expenses, and travel costs. 

The good news is that the government offers a kind of financial relief. It’s like getting a discount on your taxes. The money you spent on adoption can be subtracted from the amount you’re taxed on, which means you can end up paying less in taxes.

It’s like finding extra ways to save money on your taxes. You can look at your spending throughout the year—things like giving to charity, medical bills, or education costs—and use those to lower the amount you owe in taxes. It’s a way of making sure you don’t miss out on any opportunities to save money.

Recap

To get tax deductions and credit, ensure you account for any charitable contributions; these can significantly reduce your taxable income. Additionally, review medical expenses; certain out-of-pocket costs may be deductible. Don’t overlook education-related expenses; there are credits available for qualified expenses. 

If you make energy-efficient home improvements, explore potential credits. Also, if you are a small business owner, take advantage of Section 179 deductions for equipment purchases. Maximizing retirement contributions not only secures your future but can also offer immediate tax benefits. 

Remember to report any job-related expenses, like unreimbursed business costs. Finally, be diligent in tracking home office expenses for potential deductions. Stay informed, seize these last-minute opportunities, and navigate tax season with confidence.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. . For comprehensive tax, legal or financial advice, always contact a qualified professional in your area. S’witty Kiwi assumes no liability for actions taken in reliance upon the information contained herein.

Become a

S'witty Kiwi Credit Insider!

Get the latest credit tips and hacks in your inbox!