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Income Tax: Five Major Deductions and Credits for Married Couples

Updated on May 26, 2017

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One of the main tax deductions is medical and dental expenses. However, to be deducted medical and dental costs must be more than 7.5% of AGI (Adjusted Gross Income). Medical and dental costs spent in a tax year would be deductible if taxpayers failed to acquire insurance or any forms of reimbursements to cover those expenses during the same tax year. Dental and Medical expenditures of the spouse, dependent, and qualifying relative or child are likewise deductible. To save more money, it would be recommended to file taxes individually instead of jointly.

Deductible medical and dental expenses are the following

  • physical exams
  • dental exams
  • prescribed birth control pills
  • cosmetic surgery (if necessary such as following a disaster or accident, illness or inborn defects)
  • prescribed medicines
  • necessary items for health including wig and wheelchair
  • hospital accommodations (must be around or less than fifty dollars per person per night)
  • Treatments or any means of prevention for mental illness.

Non-deductible medical and dental expenses includes the following

  • general medical costs (even with doctor’s recommendation), forbidden treatment or operation, marijuana and other prohibited materials (even with a prescription),
  • cosmetic surgery for merely aesthetic motives,
  • sex modifications or any related procedures or services,
  • teeth whitening
  • Medicines with no prescriptions.
  • Health expenses paid by someone else excluding by a spouse and dependent

College tuition is the second major deduction. Taxpayers are allowed to deduct their college tuition, even of spouse and dependent up to $4,000.00.

Charitable contributions, donations, and expenses represent the third major deduction. If they contribute old furniture, sporting items, old clothes, gadgets, and other old items to an eligible charity organization, they can deduct their fair market value on IRS Form Schedule A. Costs from a charitable activity is also included. For example food expenses for the charitable purpose and cash donations unless if the taxpayer is using standard IRS deductions.

Automobile expense, including the mileage allowance, used for helping charities can also be deducted. Mileage may be deducted from $ 0.14 per mile. On the other hand, receipts from qualified charitable institutions should be showed to deduct these expenses. Donating a car for charity is also deductible.

A fourth major tax deduction is mortgage interests. This is the most preferred tax deduction by millions of homeowners here in the United States. In most circumstances, all mortgage interests can be considered as the tax deduction if the homeowner has the following requirements:

  • Legally responsible for the loan not to other person’s loan
  • Made the payment on an eligible home.
  • Files Form 1040 and itemize deductions on Schedule A.
  • Property tax deduction is the fifth major tax deduction. These are both state and local property taxes that are commonly tax deductible from US federal income taxes. Real estate taxes are property tax deductions

Other items eligible for itemized deductions include personal and business related expenses such as networking expenses, travel expenses, and transportation expenses.

In addition to these deductions, credits can also be used to decrease tax liability. Earned Income Tax Credit is one of them. To be qualified, a taxpayer must meet the following requirements:

  • For married couple with no dependents- their adjusted gross income must be less than $13,750.00
  • For married couple with dependents- their adjusted gross income must be less than $37,263.00
  • Married couple should be between 25 to 64 years old
  • Married couple must have investment income of less than or exactly $2,700.00
  • Married couple that cannot be declared as dependent by another person which includes relatives or parents

Child tax credits apply to taxpayers and families with the kids to offset expenses involved in raising children.

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