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Here are 7 tax deductions you might not know about

IRS TAX FORMS
Posted at 5:42 AM, Mar 17, 2022
and last updated 2022-03-17 07:55:45-04

(WXYZ) — Monday, April 18th is "Tax Day." That's just a little over four weeks away.

The Child Tax Credit has received a lot of buzz this tax season, but make sure you're up on all the deductions you may be able to take.

Cathy Lorenz, a partner and CPA with Cohen & Company in St. Clair Shores says there are two types of deductions: itemized deductions and above-the-line deductions.

Above-the-line deductions are for anybody who's eligible — no need to itemize!

"Even if you don't have enough itemized deductions, and you'd rather take the standard deduction, you still can take things like educator expenses," Cathy said.

ABOVE-THE-LINE DEDUCTIONS

Educator Expenses

Yes, educators can benefit from an above-the-line deduction.

"Teachers can take up to $250 dollars for classroom supplies," Cathy said.

Self Employed Health Insurance

Also if you're self-employed, Cathy says you can deduct your self-employed health insurance which includes Medicare.

"So, if you've retired, you're on social security, but you're working a side job, you can take your Medicare and other health insurance expenses above-the-line," she said.

Student Loan Interest

Student loan interest you paid last year can also be claimed as an adjustment to income. So, no need to itemize there.

June Flooding Losses

If you suffered from the June 2021 flooding disaster last year, the federal government declared that a disaster. So, victims can claim a casualty loss deduction without itemizing.

"People in Michigan that had more than $500 in unreimbursed losses for property and things like that that were in their basement, they can take that deduction," Cathy said.

ITEMIZED DEDUCTIONS

Lorenz said some itemized deductions people may not be aware of include medical expenses, home equity loan interest, and gambling losses.

Those who claim gambling losses up to the limit of their winnings on their federal tax return can now make that deduction on their Michigan tax return.

This deduction is also good for lottery tickets. Every time you buy one, just keep it in a file for your tax records.

If you're not sure if you should itemize, consult a reputable tax preparer. The IRS has a directory of federal tax return preparers with creditials and select qualifications.
They will know all of the deductions and credits you can take.