10 Often Ignored Tax Deductions and Credits You Might Be Missing

When it comes to filing taxes, every deduction and credit counts. Yet, many taxpayers overlook opportunities to reduce their taxable income or increase their refund. At JTM Williams Capital Management, we are dedicated to helping you minimize your tax liability and maximize your refund.

In this blog, we are exploring ten often ignored tax deductions and credits that might apply to you. By taking advantage of all applicable deductions and credits, you could potentially save more and keep your financial future on track. Let's dive into some potential tax-saving strategies you may not have considered.

Tax Deductions and Credits for Families

Education Expenses

Tax deductions and credits for educational expenses can help reduce the cost of higher education for both students and parents. 

There are two educational credits available at this time to make yourself aware of: 

The American Opportunity Tax Credit is a credit worth up to $2,500 for the expenses you paid for the first four years of college. The Lifetime Learning Credit is worth up to $2,000 per tax return and is even available to those who aren't pursuing a degree. 

Don't forget about books and lab fees. Save your receipts from the books you purchase and rent. Additionally, certain student loan interest payments may be deductible. 

Camp for Your Kids

If your children attend camp, a before and after school program, or daycare so that you can work or actively look for work, you may be entitled to the Child and Dependent Care Credit. For tax year 2024, you may claim up to $3,000 for one child or $6,000 for two or more children.

Medical Expenses

In 2024, if your medical expenses, including the miles driven for medical reasons, exceed 7.5% of your adjusted gross income and you are able to itemize your tax deductions, your expenses may be tax deductible. The cost of exercise equipment or purchasing and maintaining a spa or swimming pool may be tax deductible; if your healthcare provider recommends certain exercise equipment or the maintenance of a spa or swimming pool for your medical concerns, you may also receive a tax deduction of those costs.  If you are not self-employed, the health insurance premiums paid after taxes may be tax deductible if you itemize your deductions. 

Other Dependent Credit

If you have a dependent who is not a child, you may be able to take advantage of $500 per non-child dependent that you support. 

Tax Deductions and Credits for the Self-Employed

Health Insurance

If you are self-employed, the health insurance premiums you pay for yourself and your family may be tax deductible.

Home Office

Self-employed people may claim a home office deduction for some of their home expenses, including utilities, rent, mortgage interest, depreciation, and maintenance. Eligibility will depend on whether you use part of your home regularly and exclusively to perform administrative or managerial duties for a self-employed business. 

Mileage Expenses

In 2024, self-employed people who use their vehicle for business can deduct mileage at 67 cents per business mile drive. If you work for multiple clients, the cost of traveling between job locations is tax-deductible as well. Keeping a log of your business mileage throughout the year is crucial to help make the most of this deduction.

Other Tax Deductions and Credits

Charitable Contributions

No matter how small, charitable contributions to qualified charities are tax deductible. Remember to save your receipts for your contributions and even mileage, parking costs, and tolls that aided in your ability to participate in a walk or race. 

State Income or Sales and Local Tax Deduction

If you itemize your tax deductions, you are able to choose between two options: deduct the state income tax you paid or deduct the state sales tax you paid.

Miscellaneous itemized tax deductions

If you experience losses that are not covered by insurance, such as fires, storms, shipwrecks, or theft, you might be able to claim them as a tax deduction. However, you can only deduct these losses if they happened because of a natural disaster that the federal government has officially declared. Additionally, the loss must be more than 10% of your adjusted gross income.  

Understanding Tax Deductions and Credits with JTM 

Navigating the complexities of tax deductions and credits can be challenging, but working with someone who understands these nuances is crucial to optimizing your tax strategy. At JTM Williams Capital Management, we're committed to helping you make informed decisions. We advise you to consult with your tax professional to maximize your contributions. 

For the most accurate and up-to-date information on your taxes, schedule a brief meeting with us today by emailing Matt@JTMWilliams.com or calling/texting 703.782.3110.