16 Easiest Tax Deductions and Credits to Claim on Your Return

If getting more money on your next tax return sounds like a great idea to you, our list of easiest tax deductions and credits to claim on your return will not disappoint.

If you are anything like me, hearing the word “taxes” makes you cringe. Whether it’s taxes you pay when buying something new, taxes that are taken out from your check, or the taxes that are due when April rolls around, none of it is fun to look at. Obviously, I understand why we pay taxes and where our taxes dollars go to (whether I agree with it or not), but taxes are never fun, especially when you are in your early twenties, still trying to get your career started. Most recently, I discovered how harsh New York taxes can be on your paycheck as I’ve recently moved to the city to start a new job. Nonetheless, I guess this is all part of “adulting.” It is probably a big part of why adults would tell you not to rush growing up, when you were a kid.

As every adult knows, or should know, tax season always comes around in the late winter and early spring and taxes are due in April. As much as we all hate it, we can’t avoid it, unless you don’t mind some jail time. According to Just Facts, the federal government collected a total of almost $5 trillion in taxes from U.S. citizens. That more money than I can even picture, but it does cost a lot of money to operate the country. If you would like to learn more about what people pay in taxes in other countries, check out our list of Countries with the Lowest Tax Rates.

Since we probably all hate paying taxes and wouldn’t mind saving a little money, we have compiled a list of the easiest tax deductions and credits to claim on your return. To do this, we had to check the web for credible sources with well-written and informative articles on the matter. In this case, we sourced our information from Investopedia, Entrepreneur, and Turbo Tax. We looked for deductions and credits appearing on all the sources and included them on our list below. We used the simple averaging method to determine their ranking as it appears in this article.

So if you want to save some money next year, take a look at our list of the easiest tax deductions and credits to claim on your return.

16. Charitable donations

Most of us don’t know that donations made to charity can be claimed on our returns. What’s even better is we can also do the same thing to itemized donations. If you usually donate, you should always make sure to have a receipt from the charity, which states the value of your donations to ensure your claim.

15. States sales taxes

This one on our list of easiest tax deductions and credits to claim on your return is a little specific to where you live since it only applies to individuals living in tax-free states. To know how much you are allowed to deduct, you can refer to the table provided by the IRS for tax-free states. There are even more tax deductions you can enjoy after you have purchased a vehicle, boat, or even home building materials.

14. Accounting fees

Technically, accounting fees fall under the category of business expenses, so they are no doubt deductible from taxes. You have to remember, though, that you have to separate personal expenses from business expenses, in case some of them might have been spent in a single purchase.

13. Moving expenses to take your first job

Did this surprise you? It probably is truly one of the most overlooked tax deductions in the country. The key to getting this is to make sure you keep all receipts related to your moving expenses. This includes your moving van payments, plane fares, etc.

12. Refinancing mortgage points

This tax deduction is not as big as the others, but seriously, wouldn’t you want to have as many deductions as possible? This one means a small percentage of deduction from your refinancing mortgage points, like $33 from a total of $1,000, as an example.

11. Bad debts that you cannot collect

This only applies to longstanding debts that obviously couldn’t be collected anymore. There might be varied requirements for states in terms of the debt’s period before it becomes a valid tax deduction, so make sure you check that out to be informed.

10. Automobile tax credits

The global warming crisis is so bad right now that the government is actually willing to deduct your tax when you go green on your commute. If you start using a hybrid car or alternative fuel that’s considered good for the environment, you’re entitled to as much as $7,500 tax credits.

9. Earned income tax credit

This is probably the most popular of them all. This pertains to a refundable tax credit that is applicable to people who just lost a job, took a pay cut, or worked fewer hours the previous year. The downside would have to be the complicated requirements and qualifications, making it hard for some people to claim it.

8. Child and dependent care tax credit

Children are another example of some of the easiest tax deductions and credits to claim on your return. This one is also a popular tax credit but still, ends up being overlooked more than most tax credits we know of. There are people who pay their children’s expenses through reimbursements, so it is harder to keep track of the tax credits you’re entitled to. Take note that the law now allows up to $5,000 of tax credits from your reimbursement programs at work.

7. Student loan interest paid by parents

Back in the day, no part of any student loans was to be deducted from your tax payables. Now, the IRS implements the ruling where if your mom and dad paid the loan, it is considered as the parents’ gift to their child, which is now deductible from the taxes. No wonder it is among the easiest tax deductions and credits to claim on your return.

6. Theft loss

Losing assets through theft has a corresponding tax deductible value, which could very well be a welcome consolation after losing something. To make sure you become eligible for this tax credit, immediately report the incident to the authorities and keep a detailed report for a stronger claim.

5. Residential renewable energy tax credits

Here is another reason for you to go green at home. Did you know you can get tax credits by simply being good to the environment? The Department of Energy includes the following renewable energy on their tax credits: solar water heating, solar electric systems, geothermal heat pumps, etc.

4. Home energy efficiency improvements

If you haven’t done some green renewable energy efforts at home yet, this one would probably entitle you to tax credits. This includes energy-efficient systems on water, electricity, insulation, heating and cooling equipment, doors, windows, etc. Now, let’s see the top three on our list of easiest tax deductions and credits to claim on your return.

3. Investment advice and fees

If you have been getting advice and consultations from investment firms and companies, make sure you also keep track of your receipts and expenses. These fees are deductible from your tax. It might not be a lot, but would you not want to claim it?

2. Payroll taxes for employees

This includes taxes for social security, health care, and unemployment. The fact that these are tax credits should be enough for companies to pay their employees just and fair since all taxes are deemed deductible from what they have paid.

1. Real estate taxes

These only apply to real estate properties that are paid on business properties. The tax deduction is computed on a common solution used in all real properties within the same jurisdiction. These taxes apply to properties sold and bought in a year as well.

We all get a little stressed when it is tax season. But next time, remember the 16 easiest tax deductions and credits to claim on your return to breeze through it.