Are you still looking for a 2023 tax credit or deduction that matches your situation? Fortunately, there are other ways to lower your personal tax responsibility, and some you may even be able to squeeze in before the end of the year.
You might be surprised to discover that some types of shopping and money-making jobs can actually reduce your taxes. And you can often deduct purchases, expenses, and even basic life milestones if you qualify.
The health coverage tax credit is one of the most common advanced subsidies Americans utilize. Thanks to the Affordable Care Act, you may be able to reduce your health care expenses by taking advantage of the premium tax credit.
You may qualify for the health insurance tax credit if your income is between 100 and 400 percent of the federal poverty level (FPL). And in some cases, you may receive a lower premium even if your earnings are more than 400 percent of the FPL.
The health insurance premium tax credit lowers your monthly payment to your selected health insurance. If you use less than the amount you qualify for, you can receive the difference when you file your taxes using Form 8962.
Speaking of health-related tax deductions, you may be able to deduct Unreimbursed medical expenses that are more than 7.5 percent of your adjusted gross income and health savings account contributions.
Do you work for yourself as an entrepreneur or freelancer? Even if you just work from home, you may be able to write off some of your professional expenses. Some expenses you may be able to claim as a home office deduction for the following:
- A portion of your mortgage or rent for the space where you conduct business
- The cost of utilities, like electricity, water, and heating fuel
- Property taxes
- Maintenance and repairs, such as fixing a window in your home office
- Expenses to conduct business, like internet and phone services
Your legal tax write offs must match your business. For instance, the IRS accepts Uber and DoorDash mileage deductions as well as actual expenses, like fuel, maintenance, repairs, property taxes, and registration and other fees.
If you are a homeowner, you may be living in your tax deduction. The IRS lets you take a mortgage interest deduction and mortgage insurance premium deduction up to a certain amount each year you make payments.
You could also look into a residential energy credit for the installation of solar energy systems. Likewise, there is an electric vehicle tax credit if you purchase a new or used EV.
Other common types of tax credits include:
- Select state and local taxes, up to $5,000 (or $10,000 if married and filing jointly), like property and sales tax.
- IRA and 401(k) contributions. Amount limits depend on several factors.
- Certain charitable donations, up to 60 percent of your adjusted gross income (other limits may apply).
The IRS lists all of the available credits and deductions on its website. You can review the ones that fit your situation whether you are an individual, have a family, run a business, own a home, or have qualified expenses for health care, education, and more!