Recently on our blog, we’ve taken a look at the many different tax credits that taxpayers can use to get the most on their tax returns. However, tax credits are only half of the picture, when it comes to saving money on your taxes. The other half of that complex financial structure is all of the different deductions that can be claimed by many taxpayers, which can reduce the overall amount of taxes that must be paid. You can claim deductions on many things, from charitable contributions to simply owning a home. Now, here are some of the most common tax deductions in the United States…
The first greatest deduction that gets utilized in our country is the deduction of state and local taxes, such as income and sales taxes. Nearly 44 million Americans, which is an astounding 95% of tax returns with itemized deductions, utilize local tax deductions. This saves taxpayers a momentous sum of $300 billion. While all local sales taxes are deductible, it is, far and away, income taxes that make up most of this sum, with $283 billion in deductions.
The house that you are living in can end up saving you a good deal of money, if you play it right in your taxes. While not every property will carry a mortgage, owning any sort of real estate ends up having some sort of taxes attached. This fact allows over 39 million taxpayers the ability to make these property taxes a form of deduction. Indeed, these taxpayers were over to save over $173 billion, which is no small feat.
While the warm, fuzzy sensation that you feel inside should be enough of a reward to give to charity, it actually pays to be good, as well. What is likely to be the driving force behind the amount of money that Americans give to charity is the fact that all of that charitable giving is tax deductible. These philanthropic Americans were able to deduct $200 billion from their taxes, saving them enormous sums of money for their good deeds. These deduction don’t just count for monetary donations, either, as donations of food, clothes, and other physical gifts qualify, as well.