Taxpayers leave thousands of dollars on the table at tax time: expert

Tax season officially begins on Monday when… Internal Revenue Service (IRS) Returns will begin being accepted for the 2024 tax year, but taxpayers should be aware of deductions and credits that could be worth thousands before filing, a tax expert warns.

Carla Dennis, CEO and founder of KDA, a tax strategy agency, told FOX Business that taxpayers run the risk of leaving as much as $2,500 to $5,000 on the table due to a certain lack of awareness. Tax credits and deductions They may be eligible to claim and reduce the amount of taxes they move on.

“Many taxpayers are leaving money on the table,” Dennis said. “I’ve been in the industry for 30 years, and when I work with tax individuals and talk to them, I realize that they are very unaware of the many different tax credits they can use to offset their tax liability.”

Various tax credits and deductions are available to taxpayers who spent money on certain activities such as education, medical expenses, state and local taxes, and more.

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“Many taxpayers change jobs, go back to school, and get… Higher educationThey are not familiar with the Lifetime Learning Credit, the American Opportunity Credit, and that can help reduce their overall tax liability.”

She added that the American Opportunity Credit can be redeemable for up to $1,000 which could be helpful for people looking to pay for classes and other expenses while in school.

Taxpayers should watch, Dennis said Health care spending year-round activities because they can qualify for the medical expense deduction if that spending exceeds 7.5% of their adjusted gross income. For example, based on income of $50,000, a taxpayer can deduct expenses exceeding $3,750.

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“They need to benefit from writing Insurance premiums “If they haven’t previously taxed through an employer,” Dennis explained.

“There are long-term care premiums that constitute a write-off, as well as the copayment to go to the doctor, to the emergency room, to the office visit, the pharmaceutical copayment that you make to the pharmacy to get prescriptions filled,” she added. “Even driving to and from the doctor, you can take the miles as nature.”

the State and local tax (Salt) A deduction of up to $10,000 is available to taxpayers who itemize their returns. Taxpayers who claim the deduction should make sure their income taxes, property taxes and DMV fees are collected, Dennis said.

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Individual taxpayers should “be aware and aware of their taxes every year from January to December,” Dennis said, so they should consider speaking to a tax advisor earlier in the year to plan ahead.

She recommends that taxpayers do what she calls “12 by 12” where they look at their expenses for each month of the year one by one over a 12-day period, which she believes helps taxpayers avoid feeling overwhelmed at the last minute and forgetting about things that could save them. money when they filed their taxes.

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Dennis added that taxpayers may benefit from pausing before filing their return once it is ready to file so they can think of something they may have forgotten so they can add it before they file and avoid having to amend their return.