The Internal Revenue Service is not very generous to individual taxpayers who do not have children or other dependents and are not homeowners. If you fall into this category, you will pay taxes on much of the money you earn. However, you may qualify for some deductions, and it will save you tax dollars if you take them. So now we will talk about tax deductions for singles for 2020.
Disclosure: This post contains affiliate links and I will be compensated when you make a purchase after clicking on my links, there is no extra cost to you
The standard deduction
The Internal Revenue Service offers taxpayers the option of claiming a standard deduction or listing a number of other available deductions. You cannot do both. The standard deduction for an individual taxpayer for the fiscal year is $ 5,950. If you don’t have this amount in itemized deductions, you’ll pay more income tax if you make an item. The standard deduction and itemized deductions come from your taxable income and are reduced. Most taxpayers use the standard deduction, but you will want to choose the option that further reduces your taxable income.
If you choose to list your deductions, you can deduct some of the money you spend on health care, dental and health insurance premiums from your income. Your total medical deductions must add up to 7.5 percent of your adjusted gross income, and you can only deduct costs above that figure. For example, if 7.5 percent of your AGI is $ 4,500 and your total medical expenses for the year are $ 4,750, you can deduct $ 250. You can only deduct your insurance premiums if you pay for them yourself; it does not include anything to which your employer contributes. The threshold increases from 7.5 percent to 10 percent in 2013.
Business and employment costs
Whether you are self-employed or work for an employer, you may incur some costs for working or doing business. If you are self-employed, you can deduct a wide range of business expenses, and you can also take the standard deduction. Your business-related deductions are listed on Schedule C, not as regular itemized deductions on your return. If you work for someone else, your deductions are limited to the unpaid expenses you incur while doing your job, which represent more than 2 percent of your adjusted gross income. Mileage is deductible for self-employed and self-employed taxpayers, but excludes travel. The miles you drive to get to your place of work or employment are not counted.
If you’re detail-oriented and don’t mind saving all of your receipts for the year and increasing sales tax portions, you can also deduct it. State and local sales taxes are deductible when you list, as well as any taxes you pay your state for your vehicle. You can also deduct the amount you paid in state income tax. However, you have to make a choice. If you deduct the sales tax you paid during the year, you also cannot deduct your income tax.
If you are generous and list your deductions, you can count any charitable contributions you make during the fiscal year. However, the IRS does apply some rules. You must deliver the gift to a qualified charity, not your friend, family member, or someone else. If you receive something in exchange for the gift, you must subtract its fair market value from your donation. For example, if you won a $ 1,000 TV at your charity auction and your highest bid was $ 350, you can’t deduct the $ 350 because it’s less than the value of the TV. If the TV is worth $ 300, you can deduct $ 50. Individual contributions that exceed $ 250 require a signed certificate from the charity.
Tax Deduction Tips for Singles
If you’re single and earning some kind of education, there are many credits and deductions available from the IRS. The American Opportunity Tax Credit is available to individual students during the first four years of college. Graduate students can take credit for lifelong learning. If you earn too much money to qualify for any of these credits, individual filers can claim the tuition deduction and fees of up to $ 2,000.
All taxpayers, including individual taxpayers, can obtain deductions for certain work-related expenses. If you had to incur expenses from work, such as using your personal cell phone, computer, or car, and your employer did not reimburse you, you can cancel the expenses as unpaid business expenses on Schedule A.
Individual homeowners have the opportunity to deduct the cost of property taxes and the cost of mortgage interest paid during the year. All points you have paid to reduce your interest rate or loan origination fees are also deductible. Paid mortgage insurance premiums can be deducted by individual homeowners. Your lender will send you a Form 1098 at the end of the year with the exact amount of the deductible payments you made.
To receive a FREE guide to help grow your own online business write a comment with "INFO" below! ⬇⬇⬇
Tax Twerk is a digital platform to read about personal finance and digital marketing for freelancers and self employed entrepreneurs.