2022 tax deductions to watch beyond income, and detailed [Boss Insurance]

Remember that April 18 marks the deadline for taxpayers to file their annual return.

Tax day is usually April 15, but because that date falls on a Saturday and due to a holiday in Washington, DC on Monday, the filing deadline has been pushed back to April 18.

As of April 7, the Internal Revenue Service has processed more than 101 million returns. The average refund to taxpayers is $2,878, down from $3,175 in the same period a year earlier.

If you’re scrambling to finish your taxes before midnight Tuesday, here are some reminders of often-forgotten items that might be deductible, so you don’t miss them in your rush.

IRS Audit:What triggers it and what are the red flags that call attention

If you itemize deductions, remember:

Medical and dental expenses, health insurance premiumsIf you itemize your deductions on Schedule A, you may be able to claim expenses you paid that year for medical and dental care for yourself, your spouse, and dependents. However, you can only deduct the amount of your total medical expenses that exceeds 7.5% of your adjusted gross income. Items you can deduct include fees for physicians, dentists, surgeons, chiropractors, psychiatrists, psychologists, and alternative physicians, prescription drugs, false teeth, reading or prescription glasses, contact lenses, appliances hearing aids, crutches, wheelchairs and more.

What are Forms 8962 and 1095-A used for?

Premium tax credit: If you purchased health insurance on Marketplace, you must file Form 8962 with your tax return. The Affordable Care Act includes a special tax credit to help some people pay health insurance costs, and Form 8962 used with your Form 1095-A Marketplace health insurance statement helps you determine if you are eligible for the tax credit and, if so, how much you are entitled to. If you do not complete this form, the IRS may reject your return for incomplete information and delay your refund.

When you qualify for the tax credit, you can use it to:

reduce your taxes by claiming them when filing your tax return, or
reduce your monthly insurance payments. If you choose this option, the government pays money to your insurer during the year and you pay less for health insurance each month.

US Opportunity Tax Credit and Lifetime Learning Credit

Tuition fees, study fees: There are two tax credits available for single filers who have up to $90,000 of modified adjusted gross income or $180,000 for joint filers: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit ( LLC).

AOTC provides a credit of up to $2,500 per qualifying student for up to four tax years. The student must be pursuing a degree or other recognized educational qualification and be enrolled at least half-time for at least one academic period beginning in 2022.
SARL offers a credit of up to $2,000 per return for an unlimited number of years for one or more courses and does not require pursuing higher education.

SALT tax deduction

property tax: If you itemize your deductions, you can only deduct state and local taxes, including property taxes, up to $10,000 ($5,000 if you are married and filing separately). Note that the deduction is the total of a combination of taxes that includes state and local income and sales taxes as well as property taxes.

Crowdfunding

GoFundMe Donations: Donations made to a personal GoFundMe fundraiser, rather than a charitable fundraiser, are generally considered personal gifts and are not guaranteed tax deductible. You won’t receive a tax receipt from GoFundMe for these, the company said.

However, donations made to GoFundMe charity fundraisers are guaranteed tax deductible in the US, UK, Canada, Ireland and Australia and will automatically receive tax receipts from GoFundMe’s charity partner, PayPal Giving Fund, said GoFundMe. Donors from other countries will still receive the tax-deductible receipt via email, but should check with the local tax authority to confirm if they are tax-deductible. Donations to these fundraisers are collected by PayPal Giving Fund, a non-profit organization, and distributed to the designated charity.

(If you received money through GoFundMe or any other crowdfunding source, you can get a 1099-K from your payment processor if the amount meets certain reporting thresholds. You may need to report this income to the ‘IRS.)