Bay Area Services Incorporated

Overview

Many a tax paying individuals overlook the benefits of tax deductions but they begin to find ways to save money as the tax season for filing their tax returns draws near. In most of the cases tax deduction can decrease the cash that one owns to the Internal Revenue Service or IRS. The tax payer can also expect a bigger tax refund. In the tax system of the United States there are different types of tax deductions and the popular tax deduction is the standard tax deduction that tax payers choose to save their money. There are also many other tax deductions which individuals must take advantage of. In order to claim different tax deductions the individual has to produce a receipt or other kind of documentation that proves the expenditure. The top five tax deductions includes tax deductions on mortgage interest and property taxes, tax deductions on charitable donations, deductions on medical expenditure and health savings accounts, child and dependent care tax deductions, and the state and local tax deductions.

Medical Expenses Tax Deductions

Tax payers can expect significant tax deductions with their medical expenses. Tax payers can deduct the expenditure which goes on for medical and dental care which goes beyond 7.5% of the total income of the tax payers. For some this might seem like a big amount but some tax payers can certainly qualify for this type of tax deduction. In a family there are many children the medical amount which goes towards the care of many children qualify for this tax deduction due to the big amount involved in this kind of expenditure. A qualified health savings account one does not have to pay tax on the interest earned from this account. Any type of health related expenditure can be covered with the cash in the HAS account. A high-deductible health plan is necessary for having the HAS account. One who has been diagnosed with a serious disease for which different checkups and visits to the hospital are necessary also is eligible for this type of tax deduction.

Tax Deductions on Mortgage Interest and Property Taxes

Taxpayers can deduct the mortgage interest that one has to pay on a loan for which the collateral is one’s main residence or second home. One can claim this tax deduction only if one makes all the repayments towards the debt. A real estate property which is not used for business and is owned by the taxpayer its tax also qualifies for tax deduction.

Charitable Donations

Cash as well as non cash contributions that one makes to charitable organizations deserve tax deductions. The receipts for such contributions are necessary to claim the tax deduction. Non cash donations below $250 are not questioned but for donations exceeding $250 a receipt is needed to claim the tax deduction.

Child and Dependent Care

If the tax payer is paying someone to look after their child who is below 13 or any other dependent for whom care is needed while one works or searches work, the expenditure in such care is tax deductible.

If the taxpayer has a home based business or runs the business from home they also can claim tax deductions.