Understanding the different tax deductions and credits and applying all those that relate to you can help consumers either lower a tax bill or increase a tax refund.
BOSTON (PRWEB) March 25, 2019
It is important for consumers to be aware of the different tax deductions and credits available to them, as they can be a huge money-saver. A tax credit directly reduces the amount of tax owed to the federal and state governments. A tax deduction is the amount consumers can take away from their gross income to make their taxable income lower. American Consumer Credit Counseling explains the different tax breaks consumers should be aware of when filing their taxes.
“It is important to keep good records and understand how the different deductions work when filing your taxes – particularly given the new changes being implemented this year,” said Steve Trumble, President and CEO of American Consumer Credit Counseling. “Understanding the different tax deductions and credits and applying all those that relate to you can help consumers either lower a tax bill or increase a tax refund.”
For the 2018 tax year, the standard deduction for single filers or married couples filing separately is $12,000, $24,000 for married taxpayers filing together, and $18,000 for the heads of household. According to the IRS, the average refund so far in 2019 is $1,865, compared to $2,035 in 2018 during this time. CPA Practice Advisor found that in 2018, 101 million consumers received $282 billion in refunds from the IRS, with an average return of $2,600.
ACCC explains different tax deductions and credits when filing.
1. Educator Expense Deduction – Educators and school teachers can deduct up to $250 that was spent on school supplies for the year.
2. Student Loan Interest Deduction – This deduction allows consumers to subtract their interest payments from their taxable income if they earned less than $65,000. Those who earn more than $65,000 can deduct a reduced amount.
3. Medical Expense Deduction – Consumers can deduct unreimbursed medical expenses that are more than 10 percent of gross income during that tax year.
4. Mortgage Interest Deduction – This deduction reduces a consumer’s taxable income by their amount of mortgage interest.
5. Resident Energy Credit – Consumers can deduct up to 30 percent of the cost of the installation of solar energy systems in their homes.
6. Home Office Deduction – Consumers who regularly use part of their homes exclusively for business-related initiatives can write off costs associated with their business – such as utilities, rent, repairs, maintenance or other related costs.
7. Earned Income Tax Credit – The earned income credit ranges from $519 to $6,431 for the 2018 tax year depending on the filing status and the number of children low- and moderate-income earners have.
8. Charitable Gift Deductions – Not only does money or goods given to a charity count as deductible, but consumers can also deduct out-of-pocket expenses for charitable work such as making cookies for a charity’s fundraiser.
ACCC is a 501(c)3 organization that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:
- For credit counseling and student loan counseling, call 800-769-3571
- For bankruptcy counseling, call 866-826-6924
- For housing counseling, call 866-826-7180
- Or visit us online at http://www.ConsumerCredit.com
About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling and financial education concerning debt solutions. To help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loan assistance, youth and money, homeownership, identity theft, senior living, and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to ConsumerCredit.com or visit http://www.consumercredit.com/financial-education.aspx