Before you file your next tax return, it’s important to know what new tax deductions you qualify for. By doing your research ahead of time, you can help save money this next tax season. You may even be able to deduct more than the previous tax years because of the passing of the Tax Cuts and Job Act. Below are some of the deductions that you can potentially qualify for.
Child Care Credit
With the new Tax Cuts and Job Act, you can now use your childcare costs (while you’re at work) as a deduction for your tax return. The current law allows parents to take a tax deduction between 20-35% of those costs. If a reimbursement account is used, you are able to avoid federal income tax and the 7.65% social security. If you have expenses paid with pre-tax money, it can’t be used to take advantage of the tax credit.
If you, your spouse, or one of your dependents have accrued medical expenses that exceed 10% of your adjusted gross income (AGI), you are allowed to deduct it on your tax return. If you or your spouse are over 65, the IRS will allow you to deduct expenses should they exceed 7.5% of your AGI.
Taxpayers are eligible to deduct the following from their tax return:
- Some types of preventative care
- Medical and dental visits
- Prescribed medications
- Contact lenses and glasses
- Travel costs associated with medical or dental care
Expenses that are not eligible as a deduction are:
- Cosmetic surgeries
- Dietary supplements
Although you can’t deduct Roth contributions, you are able to deduct Traditional IRA contributions provided. It is important to know that you can deduct from this IRA so long as neither you nor your spouse has an employer-based retirement account.
The content contained on this page is strictly for informational purposes and may not apply to your specific situation. We recommend you consult with a tax professional to evaluate your unique situation. Forward Tax does not provide tax, bankruptcy, accounting or legal advice.