5 Commonly Missed Tax Breaks Before you do your 2024 Taxes

As we approach the 2024 tax season, it’s crucial to be aware of often-overlooked tax deductions and credits that can significantly impact your financial situation. At Poker Financial Group, we believe in empowering our clients with the knowledge to maximize their tax benefits. Here are five commonly missed tax deductions and credits for 2024:

1. Saver’s Credit

The Saver’s Credit encourages low- and moderate-income individuals to save for retirement by offering a tax credit based on contributions to retirement accounts. For the 2024 tax year, the adjusted gross income (AGI) thresholds are:

Single filers: AGI up to $47,025

Head of household: AGI up to $63,000

Married filing jointly: AGI up to $94,050

Depending on your income, the credit can be 50%, 20%, or 10% of your retirement contributions, up to $2,000 for individuals or $4,000 for couples. This means a potential credit of up to $1,000 (or $2,000 for joint filers).

2. Child and Dependent Care Tax Credit

If you paid for childcare or dependent care to enable you to work or seek employment, you might qualify for this credit. The credit covers a percentage of your care expenses, with a maximum of $3,000 for one dependent or $6,000 for two or more. The exact percentage (ranging from 20% to 35%) depends on your AGI.

3. Education Tax Breaks

Higher education expenses can be substantial, but tax credits can help alleviate some of the costs:

American Opportunity Tax Credit (AOTC): Worth up to $2,500 per eligible student for the first four years of higher education.

Lifetime Learning Credit (LLC): Offers up to $2,000 per tax return for qualified tuition and related expenses, beneficial for those pursuing education beyond the first four years.

It’s essential to evaluate which credit aligns best with your situation, as you cannot claim both for the same student in the same tax year.

4. State Sales Tax Deduction

Taxpayers who itemize deductions can choose to deduct state and local sales taxes instead of state income taxes. This option is particularly advantageous in states without an income tax or for those who made significant purchases, such as a vehicle or home renovation materials.

5. Medical Expense Deduction

If your unreimbursed medical expenses exceed 7.5% of your AGI, you can deduct the amount over that threshold. This includes payments for medical, dental, and certain long-term care expenses. Keeping detailed records of all medical expenditures throughout the year is crucial to maximize this deduction.

Navigating the complexities of tax deductions and credits can be challenging. At Poker Financial Group, we’re committed to guiding you through these intricacies to ensure you retain more of your hard-earned money. For personalized advice tailored to your financial situation, don’t hesitate to contact us.

Securities and investment advisory services offered through qualified registered representatives of MML Investors Services, LLC, member SIPC. Supervisory address: 10401 W Innovation Dr Suite 125, Wauwatosa, WI 53226. Poker Financial Group is not a subsidiary or affiliate of MML Investors Services, LLC, or its affiliated companies. CRN202711-7603398

Note: Tax laws are subject to change. It’s advisable to consult with a tax professional or financial advisor to understand the most current regulations and how they apply to your circumstances.