Most Common Tax Deductions For 2019 Taxes
Most Common Tax Deductions for 2019 Taxes – Here Are 7 Ways to Reduce Your Tax Bill
We get it — taxes can be a bit too complicated to understand. For instance, what exactly does a tax deduction mean, and how will it help us save a great deal of cash? What are the most common 2019 tax deductions?
In case you have these questions in mind, then you’ve come to the right place. Continue reading below to get the answers you’re looking for.
What Is a Tax Deduction?
A tax deduction is mainly any expense that you can deduct from your taxable income, thus reducing your tax liability. Your taxable income becomes lower when you subtract the tax deduction amount from your income. In other words, lower taxable income means a lower tax bill.
Tax deductions can be a huge money-saver, as they help you maximize your tax return. However, you should know that your tax benefits will have to depend on the income bracket you belong to. Self-employed businesses, small businesses, and corporations are all eligible for tax write-offs.
Standard Deduction and Itemized Deduction: What’s the Difference?
The standard deduction is basically a flat-dollar reduction in your adjusted gross income. Since there’s no need to calculate, most taxpayers prefer to choose this method.
On the other hand, itemizing allows you to deduct each deductible expense you incurred during the tax year. The more you’re able to deduct, the lesser you’ll spend in taxes. Keep in mind, however, that your itemized deductions should be greater than the standard deduction you’re entitled to.
In choosing between the two, here’s what you need to consider:
- If your standard deduction is greater than the sum of your itemized deductions, you might as well go for it.
- If your standard deduction is less than the sum of your tax deductions, it’s a smart move to itemize.
- If you don’t like the idea of handling loads of documents or you just want a faster process, opt for a standard deduction.
If you’re still having a hard time coming up with a decision on what deduction option to choose, it’s best that you consult with a tax specialist. That way, you’ll have a professional to guide you in making tax decisions.
What Are the Most Common Deductions for 2019 Taxes?
Of the hundreds of tax deductions available, here are seven of the most common ones that you can deduct from your taxable income for the year 2019:
- Medical and dental expenses
You can deduct qualified medical expenses that are more than 7.5 percent of your adjusted gross income (AGI) for the tax year. These include your diagnosis and treatment fees, as well as payments to your doctors, dentists, surgeons, psychiatrists, and nontraditional medical practitioners. Medical expenses that you can’t deduct include fees that cover personal health products, voluntary cosmetic procedures, vitamins, and those that have been reimbursed by your company.
- Mortgage interest
The mortgage interest tax deduction helps homeowners cut their federal income tax. If you have a mortgage, be sure that you keep good records, as the interest you’re paying on your home loan can help you trim your tax bill.
According to the IRS, individuals who bought homes from December 15th, 2017 onward may deduct the interest they pay on mortgage debt up to $750,000. Married couples who file separately may deduct $375,000.
- Health Savings Account
If you’re contributing to your Health Savings Account (HSA), you can write it off as a deduction. If you have self-only high-deductible health coverage, you can contribute up to $3,500 in 2019 and $3,550 in 2020. For family high-deductible health coverage, filers can contribute up to $6,900 in 2019 and $7,100 for the year 2020.
Keep in mind that you cannot claim the HSA deduction if you’re covered by other health insurance plans such as an HMO. Also, any withdrawals made are tax-free, as long as you use the money to pay for qualified medical expenses.
- Home office expenses
If there’s a part of your house that you exclusively use for business purposes, whether it’s a room or a designated space, the IRS will allow you to write off real estate taxes, utilities, maintenance, repairs, and other related expenses. As long as you’re using a space solely to conduct business, be it a small studio or a barn space, consider yourself eligible for this tax deduction.
- Student loan interest
We know how frustrating it can be to have to pay back a fortune for student debts. The good news is, you can make deductions (up to $2,500 from your taxable income if you paid interest on student loans in 2019), provided that it’s a qualified loan. According to the IRS, qualified loans are those taken for your own education, loans you’re forced to repay, and loans borrowed for someone else’s education.
- IRA contributions deduction
Although you may not be able to deduct Roth IRAs, you can still deduct contributions to a traditional IRA. Your deduction amount will depend on how much you and your spouse make, and whether you or your spouse is covered by a retirement plan at work.
- Charitable donations deduction
Not only are you making an impact in the lives of needy people when you donate to charity, but you’re also making it possible to reduce your taxable income. Whether you’re donating property or cash, you may deduct up to 60 percent of your adjusted gross income — although you might be limited to 20 or 30 percent depending on the type of contribution and the organization you’re donating to.
Donate Your Clunker and Get a Tax Deduction in Return
Did you know that you can be a recipient of a top tax deduction when you donate your old and unwanted vehicle to us at Kids Car Donations?
Since we collaborate with IRS-certified 501(c)3 nonprofit organizations, your donation will entitle you to receive a maximized tax write-off. At the same time, you get to help save the lives and restore the health of ailing children and teens in your community.
We at Kids Car Donations have been working hard to ensure that sick girls and boys from needy families can get the medical assistance and health care they need.
We sell donated vehicles and use the proceeds to fund the critical services of our charity partners. These services include medical treatment, access to free social service resources, and emotional well-being projects. We also support cash-strapped parents by offering financial assistance and free parenting classes.
As for your tax reward, expect a tax-deductible receipt in your mailbox within 30 days following the sale of your vehicle. The receipt will indicate your car’s final selling price, which serves as the basis for your tax deduction claim.
We offer free pick-up and towing of donated vehicles in all parts of the United States. Just let us know when and where you want your vehicle hauled off, and we’ll send a tow truck on the scheduled collection date.
We welcome nearly all vehicle types regardless of their condition. For more information on our donation program, you may check out our FAQs page. Contact us at our toll-free hotline 866-634-8395 or drop us a message here if you have any questions or inquiries.
Re-purpose Your Unwanted Car Now!
Donating your run-down car isn’t just about getting rid of it for free. It also gives you a chance to be a local hero and enjoy a huge tax deduction at the same time. Call us at 866-634-8395 or fill out our online donation form to make your donation now!