5 Biggest 2024 Tax Deductions: A Guide for Tax Time
It’s tax time right now, and part of the game is finding and taking advantage of tax deductions. Deductions are used to subtract from the taxpayer’s income to reduce the tax they pay.
The majority of taxpayers choose to take the standard deduction, which for 2024, is $14,600 for single or married filing separately, $29,200 for married couples filing jointly or for a qualifying surviving spouse, and $21,900 for head of household.
However, there are some deductions out there that not everyone knows about.
Here are five examples:
Tax Deduction For Charitable Donations
A lot of people take tax deductions for their charitable contributions, although the rules for doing so are somewhat complex.
According to the IRS, taxpayers can deduct charitable contributions if they itemize deductions. They cannot deduct gifts to individuals, and organizations that receive the donations must be qualified to do so.
Also, if the person donating received something in return, whether “merchandise, goods or services, including admission to a charity ball, banquet, theatrical performance, or sporting event,” they can only deduct the amount that “exceeds the fair market value” of that benefit.
To qualify for the deduction, any contribution of over $250 must be accompanied by a “contemporaneous written acknowledgment.”
Tax Deduction for Student Loan Interest
There was a major political fight throughout the Biden Administration over the then-president’s plan to offer student loan forgiveness. The courts struck down some of those efforts, but in the meantime, the IRS still offers a tax deduction for student loan interest.
According to the agency, student loan interest is defined by the IRS as “interest you paid during the year on a qualified student loan.”
Taxpayers may deduct $2,500 or the “amount of interest you actually paid during the year,” whichever is a lesser number.
Itemization is not necessary for this deduction.
State and Local Tax Deduction
Speaking of major political fights, the fate of the SALT (state and local tax) deduction cap is a point of contention in the current talks over the federal budget, with several members of Congress in high-tax states pushing for a rise in the SALT cap and threatening not to vote for any budget resolution that doesn’t meet their ask.
Under current law, the SALT deduction is limited to $10,000, or $5,000 if married filing separately. Trump, in campaigning last year, promised to eliminate the cap, but one Trump ally has proposed merely doubling the threshold to $20,000.
Home Office Deduction
Some of those who use their home as an office can deduct expenses for “the part of your home that you use for business.”
To do so, taxpayers must use their home as either the “principal place of business for your trade or business,” where they hold meetings, as a place for storage or inventory, for rental, or as a daycare facility.
Gambling Losses Deduction
With sports gambling now legal in much more of the country than was the case until fairly recently, gambling winning and losing is a much larger part of tax planning than it used to be.
While tax filers must declare their gambling winnings, they can also claim deductions for their losses, providing they itemize them, and keep a record of their wins and losses.
But How Much of an IRS Will Be Left?
The question, however, is whether the IRS will be able to function properly when it comes time to process all of those returns.
According to The New York Times, the Trump Administration has already laid off 7,000 people from the IRS, and many more are expected- with the agency possibly preparing to eliminate “as much as half of its 100,000-person workforce.”
This year, and possibly even more in future years, taxpayers may find themselves waiting a long time for their refunds- especially if they have a complex tax return that requires a great deal of care from IRS personnel.
About the Author: Stephen Silver
Stephen Silver is an award-winning journalist, essayist and film critic, and contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. For over a decade, Stephen has authored thousands of articles that focus on politics, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter.
