Tax season can feel overwhelming, but one surefire way to reduce your stress (and your tax liability) is to ensure you’re claiming all the deductions you’re eligible for. Whether you’re an individual taxpayer or a business owner, missed deductions can mean leaving hard-earned money on the table. At Tax Law Advocates, we specialize in helping taxpayers identify every possible deduction while staying compliant with tax laws.

If you want to maximize your deductions and reduce your tax burden, call Tax Law Advocates at 855-612-7777 or visit taxlawadvocates.com to schedule a consultation today.

What Are Tax Deductions?

Tax deductions reduce the amount of your income that is subject to taxes, potentially lowering your overall tax bill. Deductions can be itemized or claimed as part of the standard deduction, and they apply to a wide range of expenses for both individuals and businesses. However, understanding which deductions apply to you—and how to claim them—can be challenging.

Commonly Overlooked Tax Deductions for Individuals

  1. Medical and Dental Expenses

    • You can deduct qualifying out-of-pocket medical expenses that exceed 7.5% of your adjusted gross income (AGI). This includes costs for prescriptions, medical procedures, and even travel expenses related to medical care.
    • Pro Tip: Keep detailed records of all medical expenses, including receipts and statements, to substantiate your claims.
  2. Student Loan Interest

    • Eligible taxpayers can deduct up to $2,500 of student loan interest, even if someone else pays the loan for them.
    • Note: This deduction is subject to income limits, so consult with a tax professional to confirm eligibility.
  3. Home Office Deduction

    • If you use part of your home exclusively for work, you may qualify for a home office deduction. This includes a portion of rent, utilities, and even internet costs.
    • Tip for Remote Workers: This deduction applies to self-employed individuals, not employees working remotely.
  4. Charitable Contributions

    • Don’t overlook small contributions, like out-of-pocket expenses for volunteering or mileage driven for charitable purposes.
    • You can deduct 14 cents per mile driven for charity work.
  5. State Sales Taxes

    • If you live in a state without an income tax, you can deduct state sales taxes instead. Big-ticket purchases, such as a car or boat, may also qualify for additional deductions.
    • Use the IRS’s Sales Tax Calculator to determine your deduction.

Key Tax Deductions for Small Businesses

  1. Vehicle Expenses

    • Deduct the cost of using a personal vehicle for business purposes, either through the IRS standard mileage rate or by tracking actual vehicle expenses (e.g., fuel, maintenance).
    • Best Practice: Maintain a detailed mileage log to ensure accurate deductions.
  2. Professional Development

    • Expenses for continuing education, training, certifications, and even professional memberships can be deducted.
    • Tip: Keep receipts for courses, conferences, and subscriptions.
  3. Depreciation of Equipment

    • Small businesses can deduct the cost of equipment and property depreciation. Under Section 179, you may also qualify to deduct the full purchase price of qualifying equipment in the year of purchase.
    • Advice: Work with a tax professional to ensure depreciation calculations are accurate.
  4. Startup Costs

    • New businesses can deduct up to $5,000 in startup costs, such as legal fees, research, and marketing expenses.
  5. Employee Benefits

    • Costs related to employee benefits, such as health insurance and retirement contributions, are tax-deductible.
    • Action Step: Evaluate whether offering additional benefits could provide tax savings for your business.

Recent Tax Law Changes That Impact Deductions

Tax laws evolve frequently, affecting eligibility for certain deductions. Here are some recent updates to keep in mind:

  1. Increased Standard Deductions

    • For 2024, the standard deduction is $13,850 for single filers and $27,700 for married couples filing jointly. Ensure you evaluate whether itemizing deductions will save you more than taking the standard deduction.
  2. Changes to Home Office Deductions

    • While employees working remotely cannot claim this deduction, self-employed individuals remain eligible.
  3. Limitations on SALT Deductions
    • The state and local tax (SALT) deduction remains capped at $10,000, impacting taxpayers in high-tax states.
  4. Bonus Depreciation

    • Bonus depreciation rates are gradually declining, so businesses should consider accelerating equipment purchases to maximize deductions.

Why Accurate Documentation Matters

The IRS requires proof for all claimed deductions. Here’s how to ensure you’re prepared:

  • Keep Receipts: Save receipts for all deductible expenses, whether for medical care, business purchases, or charitable contributions.
  • Use Digital Tools: Accounting software or apps can help track expenses and organize records.
  • Retain Tax Records: Maintain documentation for at least three years in case of an audit.

How Tax Law Advocates Can Help

Navigating tax deductions can be complicated, especially with changing laws and unique personal or business circumstances. At Tax Law Advocates, our team of experienced tax professionals specializes in helping individuals and businesses:

  • Identify Missed Deductions: We’ll review your tax situation to uncover deductions you may have overlooked.
  • Maximize Tax Savings: By ensuring all eligible deductions are claimed, we’ll help reduce your overall tax liability.
  • Ensure Compliance: Our experts stay up-to-date with tax law changes to ensure your filings are accurate and compliant.
  • Provide Peace of Mind: Whether you’re facing an audit or need help with tax planning, we’ll be your trusted partner.

Don’t Leave Money on the Table

Every taxpayer deserves to maximize their deductions and keep more money in their pocket. If you’re unsure about the deductions you’re eligible for or want professional guidance, contact Tax Law Advocates today. Call us at 855-612-7777 or visit taxlawadvocates.com to schedule a consultation.

At Tax Law Advocates, we’re committed to helping individuals and businesses achieve tax success while staying compliant with all regulations. Don’t wait—take control of your tax situation today!