Standard Deductions
Higher Standard Deductions in 2021
For tax year 2022, the standard deduction went up slightly to adjust for inflation. When you pay taxes, you have the option of taking the standard deduction or itemizing your deductions. If you itemize, you calculate your deductions one by one. Itemizing is more of a hassle, but it’s worth it if your itemized deductions exceed the amount of the standard deduction.
​
Tax Deductions and Credits to Consider for Tax Season 2021
Here are some deductions and credits you might be able to claim on your 2021 tax return see below:
Charitable Deductions
If you like to give like no one else, we have some great news! In an effort to encourage more charitable giving, the CARES Act allows you to deduct up to 100% of their adjusted gross income (AGI), which is your total income minus other deductions you have already taken, in qualified charitable donations if you plan to itemize their deductions.
What if you’re taking the standard deduction? Well, the CARES Act added a new “above-the-line” deduction that will help you write off up to $300 of charitable contributions you made in cash.
Medical Deductions
If you spent a lot of time in the hospital or found yourself with some hefty medical bills last year, you might be able to find at least some tax relief.
You can deduct medical expenses above 7.5% of your adjusted gross income (AGI), which is your total income minus other deductions you have already taken.For example, if your AGI was $100,000, you can deduct out-of-pocket medical expenses above $7,500 in 2021. But you have to itemize your deductions in order to write off those expenses on your tax return.
Business Deductions
If you're self-employed, there are a bunch of deductions you can claim on your tax return—including travel expenses and the home office deduction if you use a part of your home to conduct business.
​
​
​
​