The 2025 tax season is here, and one of the best ways to lower your tax liability is to ensure you’re taking full advantage of all available deductions. Whether you’re filing as an individual or a business, understanding what’s deductible can make a significant difference in the taxes you owe—or the refund you receive. Here’s a guide to help you maximize your deductions this year.
1. Deductible Expenses for Individuals
a. Medical and Dental Expenses: If your out-of-pocket medical expenses exceed 7.5% of your Adjusted Gross Income (AGI), the excess is deductible. This includes:
Doctor and dentist visits
Prescription medications
Health insurance premiums (if not covered by your employer)
Long-term care expenses
b. State and Local Taxes (SALT): You can deduct up to $10,000 in combined property, state, and local income or sales taxes.
c. Mortgage Interest: If you have a home loan, mortgage interest remains deductible for loans up to $750,000 for new homeowners.
d. Charitable Contributions: Contributions to qualified charities are deductible, including cash donations, goods, and mileage driven for charitable purposes.
e. Education Expenses: If you’re paying off student loans, up to $2,500 in student loan interest is deductible, subject to income limits.
2. Deductible Expenses for Businesses
a. Business Use of Your Home (Home Office Deduction):I f you work from home, you may qualify for this deduction. It covers:
A portion of rent or mortgage
Utilities and internet
Maintenance and repairs for your workspace
b. Business Meals and Entertainment:
50% of qualifying business meal expenses are deductible if directly related to business activities.
c. Travel Expenses: When traveling for business, you can deduct airfare, hotels, rental cars, and even per diem rates for meals.
d. Equipment and Software: Businesses can deduct purchases of equipment, software, and tools under Section 179, up to $1,160,000 for 2025.
e. Employee Benefits: Health insurance premiums and contributions to retirement plans for employees are deductible.
3. 2025 Updates to Keep in Mind
Clean Energy Credits-New and expanded tax credits are available for energy-efficient home improvements and the purchase of electric vehicles (EVs).
Temporary Full Deduction for Meals.
Higher Standard Deductions
Tips for Maximizing Deductions
Keep Detailed Records: Save all receipts, invoices, and proof of payments for deductible expenses.
Track Mileage: Use an app or logbook to document mileage for business or charitable purposes.
Work with a Tax Professional: A qualified tax preparer can ensure you don’t miss any deductions.
Understanding what’s deductible is a powerful tool for lowering your tax liability. By staying informed and organized, you can keep more money in your pocket this tax season. If you have questions or need help with the complexities of deductions, Tax Geaks is here to help!
📲 Contact us today at Tax Geaks for personalized tax advice and services.
댓글