3 Tax Deductions That Save You The Most
Our favorite thing to do for customers is to save them money. Make sure that you track these three deductible expenditures that can save you the most. Keep track of your spending over the year, so it’s easy to deduct at tax time!
Three Tax Deductions that Can Save Money
1. The Child Care Tax Credit
You can deduct childcare! We all know that it’s not cheap to pay for childcare, and now you can get something back for all the money that you spend every week.
Here are the details:
The Child Care Tax Credit allows a parent to claim a credit of up to 35% on the first $3,000 in expenses for a child (or the first $6,000 for two or more children), as long as the following conditions were met:
- The child was your dependent and under 13 (or incapable of caring for themselves if older).
- The parent could not work, or look for work, without childcare.
- The daycare provider must meet certain other IRS qualifications.
2. State and Local Income or Sales Tax
If you paid state or federal income tax on last year’s return, you can deduct that amount from this year’s taxes. You can also deduct large sales taxes – for example, from the purchase of a car or boat. Keep your receipts from these purchases throughout the year so you can use them at tax time.
3. Mortgage Points
Did you pay up-front points to your lender to get a good mortgage rate? Good news: you can deduct the full amount of those points. Just make sure that your mortgage meets these criteria:
- The home is your principal residence
- Points are within industry standards
- You have proper documentation
Points that don’t meet these requirements can still qualify, but must be spread evenly over the life of the loan.
We hope these tips will help save you money and time! Feel free to contact us with your questions.