Most taxpayers love deductions because they reduce your taxable income and, therefore, also reduce your tax liability. But not everyone loves going through the painstaking process of itemizing your returns.
If you fall into the latter category, there are numerous deductions you can claim without having to itemize, As the AARP reported, these are known as “above-the-line” deductions because they refer to Line 11 on IRS Form 1040, which is where you put your adjusted gross income (AGI). The first line below that, Line 12, is where you would put your itemized deductions from Schedule A.
If you want to boost your tax return in 2024 without having to go through a lot of pain, here are six effortless tax deductions you don’t have to itemize.
1. Traditional IRA Contributions
You can deduct contributions to traditional IRAs up to an annual limit set by the IRS. As MoneyTalksNews reported, for the 2023 tax year — the one due in spring 2024 — workers younger than age 50 can contribute up to $6,500 to an IRA, while those age 50 and older can contribute up to $7,500. Keep in mind that Roth IRAs aren’t eligible for a deduction.
2. Half of Self-Employment Taxes
If you’re self-employed, you can deduct 50% of the 12.4% Social Security tax on net self-employment income up to an annual ceiling, according to the NOLO legal website. You can also deduct 2.9% Medicare tax on all net self-employment income.
3. Health Savings Accounts Contributions
Americans with qualifying high-deductible health insurance plans can open an HSA and deduct the contributions to the plan. For the 2023 tax year, those with self-only coverage can contribute up to $3,850 to an HSA, according to MoneyTalksNews, while those with family coverage have a contribution limit of $7,300. If you are 55 and older, you are eligible to make an additional $1,000 in contributions.
4. Alimony Payments
If you are making alimony payments to a former spouse, you might be able to deduct those payments from your income. This deduction doesn’t apply to everyone, however. According to the IRS, you can’t deduct alimony or separate maintenance payments made under a divorce or separation agreement under these circumstances:
- It was executed after 2018
- It was executed before 2019 but later modified if the modification “expressly states the repeal of the deduction for alimony payments applies to the modification. Alimony and separate maintenance payments you receive under such an agreement are not included in your gross income.”
5. Military Moving Expenses
If you have a permanent change of station, you can deduct “reasonable” moving expenses that might include the cost of moving household goods, personal effects, storage and traveling expenses (including lodging) to your new home.
6. College Tuition and Fees
Depending on your income, you might be able to deduct up to $4,000 in higher education tuition and fees you pay for yourself, your spouse or a dependent, according to NOLO. However, this deduction isn’t allowed if you claim the American Opportunity tax credit or Lifetime Learning Credit.
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