Taxes for 2023: 6 most profitable deductions that many do not know about - ForumDaily
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Taxes for 2023: 6 most profitable deductions that many people do not know about

After the holidays, the worst thing awaits everyone: tax season. Americans will have to get out their calculators and explain to the IRS what they did with their money in 2023. How to Save with Itemized Deductions Explains Fool.

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We'd all like to pay as little as possible, and for many, that means claiming the standard deduction based on their tax status.

But sometimes itemized deductions can save you even more. If you qualify for some of the six deductions listed below, you may want to consider using them on your 2023 tax return.

1. Out-of-pocket medical expenses.

You are allowed to deduct personal medical expenses that exceed 7,5% of your 2023 adjusted gross income. For example, if you earned $60 in 000, 2023% is $7,5. Therefore, you cannot deduct personal expenses on your taxes of $4500 or less.

On the subject: How retirees can save on US taxes: an additional little-known deduction

Medical expenses include more than just doctor and hospital visits. You can also deduct expenses such as birth control pills, breast pumps, dental and vision care, nursing care, wheelchairs and more. But you can only deduct the amount you actually paid. You cannot write off anything paid by your insurer on your behalf.

This type of deduction may be useful for those who had serious accidents or illnesses in 2023 that resulted in high medical bills. But you will need receipts to prove the amount you paid.

2. Charitable donations

Those who donated to charity in 2023 will be able to deduct those donations from their taxes, provided they gave the money to a qualifying tax-exempt organization.

Typically, you can deduct up to 50% of your AGI (Adjusted Gross Income) from donations. But some private funds have a 30% limit.

You can also claim a deduction for non-cash items. This could be old clothes or household items you donated, or food you donated to a local food bank. But you will need receipts to prove your donation. If it states more than $250, you will also need written confirmation from the charity.

And if your non-cash donation was valued at $500 or more, you'll need an appraiser to verify the item's value. Please keep in mind that the fair market value of donated items may not be the original purchase price.

You can also deduct mileage and other travel expenses if you traveled while working for a charity and were not reimbursed for those expenses. But again, you will need to keep your receipts.

3. Expenses for working from home

Those who work from home and are self-employed can deduct home office expenses and business-related expenses on their taxes. This may include computers, home internet, office supplies, and business or subscription software. The size of this deduction varies greatly depending on the individual and the type of business they are in, but for some it can be quite significant.

4. Mortgage interest

Those who paid mortgage interest can deduct it from their taxes. You should receive a form from your lender showing how much you paid in mortgage interest during the year. All you have to do is provide this information to your tax professional or enter it into your tax filing software.

5. Property taxes

Homeowners can also deduct local and state property taxes on their primary residence to reduce their tax bills.

That is, a person pays tens of thousands of dollars to the city or state. This amount can be deducted from your federal taxable income because you used it to pay your local taxes.

The amount of this deduction will vary depending on cost and location. Homeowners must receive a notice from their city or town indicating the amount they must pay in property taxes each year.

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6. Gambling losses

Players can deduct an amount equal to their winnings for the year. This means that if someone were to lose at least as much as they won gambling, those losses would effectively cancel out the impact that their winnings would have on their taxes.

It is important to understand that you cannot deduct more than your winnings. So if you lost a ton of money and didn't win anything, you won't be able to claim the gambling loss deduction.

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