Tax deductions

There are 13 tax deductions you need to know to prepare your 2021 taxes


Tax season will be here before we know it, and it always seems to surprise us.

One thing to know is how to reduce that tax bill.

With so many new stimulus check and child tax credit laws, taxes can be confusing next year, and what you owe or collect can be surprising.

There are many tax deductions that can help you reduce the bottom line of what you may owe., and ways to get some of that money back.

Related: Stimulus Checks Worth Up To $ 1,100 Starts Going Out Yesterday, Is One Of Them Yours?

Here are 13 deductions to help you save on your 2022 tax returns

Incentive and work related tax credits

The first, and perhaps the most talked about, is the child tax credit.

Many families were able to recover the first half of this credit, divided into 6 smaller advance payments.

This left half of the payment remaining so that it could be claimed on your 2021 tax return in 2022.

Related: $ 1,000 in Surprise Stimulus Payments This Week, Do You Qualify?

Children under 6 can be claimed for a credit of $ 3,600 and children 6 to 17 can be claimed for $ 3,000.

Dependents aged 18 are eligible for $ 500, as well as dependents aged 19-24, provided they are enrolled in university.

The previous credit before the American Rescue Act changed the amount was $ 2,000 per child.

Dependents who can be claimed for this credit include a child, stepson, foster child, brother, stepbrother, stepbrother, grandchild, niece, or nephew and adopted child.

Related: 5 Ways Americans Can Collect Stimulus Payments In 2022

The next important deduction to keep in mind is the payback refund credit.

This is for anyone who did not get the third stimulus check or received only part of it when they were entitled to the full amount.

The Income Tax Credit will reduce the amount of taxes owed for working families with low to moderate incomes.

Lifelong learning credit can be claimed for yourself, your spouse, or your dependent paying for higher education.

The income requirements to claim this credit will be released in January 2022.

Related: Parents Can Claim Child Tax Credits Worth $ 1,800 or $ 3,600 In Just 5 Days, Here’s How

Saver credit is available for those with an IRA or 401k if you contribute.

Education and family credits

The U.S. Opportunity Tax Credit is available to first-time college students for their first year of study.

You do not have to have a criminal drug addiction to qualify.

The income threshold for 2020 was $ 80,000 for full credit and $ 90,000 for partial credit.

Related: Will You Get A Surprise Stimulus Payout Worth Up To $ 8,000 Next Year?

Figures have not been released for 2021 but will be in January.

The credit is worth up to $ 2,500 and is refundable up to 40% of what is left after your tax bill is reduced to $ 0.

The credit for child and dependent care this year is $ 8,000 per child or $ 16,000 for two or more children.

You will need to show proof of the expenses you get from raising your child or dependent to recover up to 50% of this credit.

If you adopted a child this year, you can claim the adoption tax credit.

Related: If You Apply For SNAP Food Stamps Or Social Security Benefits, You’ll Get Them Sooner Soon

This is designed to cover adoption costs, court costs, attorney fees, travel, and any other expenses that you have encountered during the adoption process.

The maximum that could be claimed in 2020 was $ 14,300.

Tax credits related to everyday life

If you incurred medical or dental expenses that represent more than 7.5% of your AGI, you can deduct them.

Related: Child Tax Credit: What Happens To Prepayments In 2022 If They Are Not Extended?

This includes fees for doctor, dentist, specialist, physician and mental health visits, hospital visits, nursing home care, acupuncture, drug addiction treatment and things like glasses, contacts, wheelchairs, or other medical assistive equipment.

A residential energy credit exists for those who have energy efficient homes.

If you’ve installed energy-efficient windows, doors, roofs, insulation, heating systems, air conditioning systems, water heaters, stoves or solar-powered appliances, you can claim them.

There is an interest deduction on student loans for those who have paid interest on student loans.

Related: First Checks Issued This Week With 2022 Social Security COLA Increase

If you contributed to a health savings account, these dollars will not be taxed by the federal government.

You can deduct the contributions made to the account.

Finally, there is the charitable donation deduction, which is one of the most commonly used tax deductions.

You will need to detail any donations made, which may include property or money donated to qualified organizations.

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