6. Not reducing your taxable income
Taxpayers can easily reduce their taxable income by itemizing deductions on their tax returns. However, more than 75 percent of taxpayers think that the standard deduction is better. It might be easier, but Lisa Lewis, a tax expert, and a certified public accountant, says that there are deductions you can claim without itemizing.
For instance, you can actually deduct up to $2,500 when it comes to student loan interest without having to itemize. Other expenses that don’t require itemizing are moving-related costs or job-hunting expenses. Plus, on this year’s tax return, a traditional IRA contribution of $6,000, or $7,000 in case you’re older than 50, is deductible too.
Identify these deductions first so you can reduce your taxable income.
Psst! Here Are 11 Lesser-Known Tax Deductions You Shouldn’t Miss This Year!
