Remember that April 18 marks the deadline for taxpayers to file their annual returns.
Tax Day is typically April 15, but because that date falls on a Saturday, and due to a Washington, D.C. holiday on Monday, the filing deadline was pushed to April 18.
As of April 7, the Internal Revenue Service has processed more than 101 million returns. The average refund to taxpayers is $2,878, down from $3,175 at the same time a year earlier.
If you’re scrambling to finish your taxes by midnight Tuesday, here are some reminders of often-forgotten items that might be deductible, so you don’t miss them in your haste.
IRS Audit:What triggers it and what are red flags that draw scrutiny
If you itemize deductions, remember:
Medical and dental expenses, health insurance premiums: if you itemize your deductions on Schedule A, you may be able to deduct expenses you paid that year for medical and dental care for yourself, your spouse, and your dependents. However, you can deduct only the amount of your total medical expenses that exceed 7.5% of your adjusted gross income. Items you may deduct include fees to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners, prescription drugs, false teeth, reading or prescription eyeglasses, contact lenses, hearing aids, crutches, wheelchairs and more.
What are Forms 8962 and 1095-A for?
Premium tax credit: If you bought health insurance from the Marketplace, you must file Form 8962 with your tax return. The Affordable Care Act includes a special Premium Tax Credit to help certain people pay the costs of health insurance, and Form 8962 used with your Form 1095-A Marketplace health insurance statement helps you determine whether you’re eligible for the tax credit and, if so, how much you’re entitled to. If you fail to file this form, the IRS may reject your return for incomplete information and delay your refund.
When you qualify for the tax credit, you can use it to:
- reduce your taxes by claiming it when you file your income tax return, or
- reduce your monthly insurance payments. If you choose this option, the government pays money to your insurer over the course of the year, and you pay less for health insurance each month.
American Opportunity Tax Credit and Lifetime Learning Credit
College tuition, education expenses: There are two available tax credits for single filers who have up to $90,000 of modified adjusted gross income or $180,000 for joint filers: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC).
- AOTC provides a credit up to $2,500 credit per eligible student for as many as four tax years. The student must be pursuing a degree or other recognized education credential and enrolled at least half time for at least one academic period beginning in 2022.
- LLC offers a credit up to $2,000 credit per return for an unlimited number of years for one or more courses and doesn’t have to be pursuing a degree.
SALT tax deduction
Property tax: If you itemize your deductions, you can only deduct state and local taxes, including property taxes, up to $10,000 ($5,000 if you’re married and filing separately). Note the deduction is the total of a combination of taxes that includes state and local income and sales taxes as well as property taxes.
Crowdfunding
GoFundMe donations: Donations made to a personal GoFundMe fundraiser, rather than a charity fundraiser, are generally considered to be personal gifts and aren’t guaranteed to be tax-deductible. You won’t be issued a tax receipt from GoFundMe for these, the company said.
However, donations made to GoFundMe charity fundraisers are guaranteed to be tax-deductible in the U.S., the U.K., Canada, Ireland, and Australia and will receive tax receipts automatically from GoFundMe’s charity partner, PayPal Giving Fund, GoFundMe said. Donors in other countries will still be emailed the tax-deductible receipt but will need to check with the local tax authority to confirm if they are tax-deductible. Donations to these fundraisers are collected by PayPal Giving Fund, a non-profit organization, and distributed to the designated charity.
(If you received money via GoFundMe or any other crowdfunding source, you may get a 1099-K from your payment processor if the amount meets certain reporting thresholds. You may need to report this income to the IRS.)
More of your 2022 tax season questions answered
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
Comments