If you qualify for a few of the six itemized deductions below, you might consider going this route on your 2023 taxes.
- Out-of-pocket medical expenses
You’re allowed to deduct out-of-pocket medical expenses that exceed 7.5% of your adjusted gross income in 2023. For example, if you earned $60,000 in 2023, 7.5% is $4,500. So you couldn’t deduct out-of-pocket expenses of $4,500 or less. But if you had $10,000, you’d be able to deduct $5,500 of this on your taxes this year.
Medical expenses don’t just include doctor and hospital visits. You can also deduct costs like birth control pills, breast pumps, dental and vision care, nursing care, wheelchairs, and more. But you can only deduct what you actually paid. You cannot write off anything your insurance paid on your behalf.
This type of deduction could be valuable for those who had serious accidents or illnesses in 2023 that led to high medical bills. But you’ll need receipts proving what you paid.
- Charitable donations
Those who donated to charity in 2023 can write these donations off on their taxes as long as they gave the money to a qualifying tax-exempt organization. It’s usually possible to write off donations of up to 50% of your AGI. But certain private foundations have a 30% cap.
You can claim deductions for non-cash items too. This might include old clothing or household goods you donated as well as food you gave to a local food bank. But you’ll need receipts proving your donation. If it was worth more than $250, you’ll also need a written acknowledgement from the charity.
And if your noncash donation was valued at $500 or more, you’ll need an appraiser to verify the value of the goods. Keep in mind, the fair market value of the donated items may not be the same as the original purchase price.
You may also be able to write off mileage and other transportation-related costs if you traveled while you were working for a charity and were not reimbursed for these expenses. But again, you’ll need to keep your receipts.
- Home office expenses
Those who work from home and are self-employed can write off home office and business-related expenses. This can include computers, home internet, office supplies, and business software or subscriptions. The value of this deduction varies significantly depending on the individual in question and the type of business they run, but it can be fairly substantial for some.
- Mortgage points
Those who paid mortgage points can deduct these on their taxes. You should get a form from your lender showing how much you paid in mortgage points and mortgage interest during the year. All you have to do is provide this to your tax professional or enter it into your tax-filing software and let them do the rest.
- Property taxes
Homeowners can deduct state and local property taxes on their primary residence to lower their tax bill, as well. The size of this deduction will vary depending on the value of the lot and its location. Homeowners should get a notice from their city or township indicating how much they owe in property taxes each year.
- Gambling losses
Gamblers can deduct up to the amount of their winnings for the year. This means that if someone lost at least as much as they won while gambling, these losses would effectively cancel out the effect that their win would have on their taxes.
It’s important to recognize that it’s not possible to deduct more than your winnings. So if you lost a bunch of money and didn’t win anything, you won’t be able to claim a gambling loss deduction.
This isn’t a comprehensive list of tax deductions, but it should give you some idea of the types of things that could help you save on your taxes. Your tax software should ask you questions to help you determine which tax deductions you qualify for and whether itemizing deductions is the way to go. But if you have any questions, consult a tax professional who can advise you on your specific situation.
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