When tax season rolls around, you might feel tempted to take the easiest route to filing. However, if you miss potential deductions because you don’t feel like sifting through receipts, you do yourself a tremendous financial disservice.
If you qualify, the following four deductions can slice off a healthy chunk of your tax bill and make April 15 a little less scary.
Underinsured patients can rejoice — the IRS lets you deduct any medical expenses that exceed 10 percent of your adjusted gross income, or AGI. Let’s say, for example, that you earned an AGI of $50,000 last year and you have medical bills that total $10,000. You could deduct $5,000, which would cut your bill in half.
Many different types of medical expenses apply, from major procedures like surgeries to dental and vision care. You can also deduct mileage and expenses related to traveling for treatment. For instance, if you stay at a hospital that doesn’t validate parking, you can use those receipts to cut your tax bill.
Reduce your expenses even further by taking advantage of online coupons for free or reduced-cost health screenings, prescriptions, eyeglasses, and other expenses. They won’t help you with Uncle Sam, but they’ll allow you to keep more cash in your wallet.
Child Care Tax Credit
Daycare, babysitters, nannies and other childcare providers take a big chunk out of your earnings, especially if you have multiple children. Fortunately, you qualify for the child care tax credit, which allows you to deduct a certain percentage of child care expenses from your tax bill.
The exact amount depends on how much you earned during the applicable tax year. Additionally, kids aren’t the only potential qualifying people. You can also deduct expenses related to caring for older family members who cannot care for themselves.
If you’re thinking of taking advantage of solar power, now’s the time. The IRS allows homeowners to take a tax rebate that amounts to 30 percent of the cost of solar panels used to heat and cool their homes through December 2019. After that, the percentage decreases.
Solar energy doesn’t just cut your tax bill. It can also shave decimal points off your utility bills because you’re not using as much energy from the power grid. Plus, you can often find online coupons for solar panel purchases and installation, so shop around before you settle on a product and installer.
If you’re thinking about changing careers or if you’re chasing a promotion that’s just out of reach, returning to school can benefit you both financially and mentally. Tuition costs money, of course, which is why the IRS offers the lifetime learning credit.
It allows you to deduct from your taxes up to $2,000, or 10 percent of the first $10,000 you spend on school. You can take this deduction for multiple years — as long as you’re in school — and the tax break can help ease the financial burden related to continuing education. Just keep in mind that you can’t count any tuition or other education expenses for which you’ve already been reimbursed, such as through a program with your employer.
Cutting your tax bill will give you a good financial start for 2017. Take advantage of the credits, deductions, and rebates listed above. While you’re at it, save even more money by signing up for our special savings and deals. We’re dedicated to helping consumers save money no matter what they buy.