Maximize Tax Deductions & Credits Before the April 15th Filing Deadline

By: Anne Auerbach

Manager, Tax

As the upcoming tax season approaches, it’s time to maximize your tax deductions and credits to ensure you get the most out of your return. Tax deductions and credits are a powerful way to reduce overall tax liability and keep money in your pocket. Many taxpayers miss out on valuable deductions simply because they aren’t aware of them. 

In this blog, we will outline some commonly overlooked individual tax deductions and credits and provide a few helpful reminders you might want to consider as the April 15 filing deadline draws near.

Creative Tax Deductions To Consider This Year

Tax deductions are more than just a way to save money—they’re a powerful tool to maximize your financial health. By exploring our top five recommendations, you’ll discover smart strategies to keep more of your hard-earned income.

Max Out Your Traditional IRA Contributions by April 15th

A traditional IRA is a retirement savings account that allows you to contribute pre-tax income, which can reduce your taxable income for the year. The funds within the account grow tax-deferred, meaning you won’t pay taxes on any earnings until you withdraw the money during retirement. This provides an immediate tax benefit, as you reduce your current taxable income while saving for your future.

You can contribute to a traditional IRA until April 15th, 2025 to receive a tax deduction on your 2024 tax return. In 2024, the IRA contribution limit is increased to $7,000 ($8,000 for individuals age 50 or older). Deductible contributions may be subject to limitations depending on whether an employer plan and your income level cover you.

Make Strategic (and Thoughtful) Charitable Donations

Charitable giving not only supports causes you care about but can also lower your taxes. To maximize tax deductions and benefits, start by understanding the standard deduction vs. itemizing. The standard deduction offers a set amount ($14,600 for single filers and $29,200 for joint filers in 2024), which is simpler if your qualifying deductions don’t exceed this limit. If they do, itemizing may save you more—and tracking all charitable contributions becomes vital.

Keep receipts and acknowledgment letters for your personal tracking purposes and in case of an audit. For cash donations, you must have a record of the contribution, such as a bank statement or credit card receipt or a written acknowledgment from the charity for donations of $250 or more.

You must keep a detailed record of what you gave for non-cash donations like clothing, household goods, or furniture. The IRS requires a description of the items donated, their fair market value, and, in some instances, an appraisal.

Review Your Interest Payments

No, interest isn’t always bad. Yes, you can actually take advantage of most of the interest you’ve paid in 2024.

You can deduct up to $2,500 in student loan interest paid in 2024 on your tax return. The good news is that this is an “above-the-line” deduction, meaning you don’t have to itemize your deductions to take advantage of it. You can still benefit from this tax break even if you take the standard deduction.

Similarly, homeowners may benefit from deducting mortgage interest if they opt to itemize their deductions. Mortgage interest applies to loans used to buy, build, or improve your primary or secondary home, and it can significantly reduce your taxable income, especially in the early years of your mortgage when interest payments are higher.

To claim this deduction, look out for Form 1098 from your mortgage lender, which outlines the total mortgage interest you paid for the year. This information is generally sent to you in January, making it easier to accurately file your tax return and potentially save thousands.

Deduct Home Office Expenses

You may be eligible for the Home Office Deduction if you used a portion of your home regularly and exclusively for business.

The deduction allows for expenses directly related to the office space, such as painting or repairs. You can also deduct expenses indirectly related to that portion of your home, such as rent, utilities, and insurance.

Bonus: Tax Break for Teachers

Teachers and other eligible educators can deduct up to $300 of unreimbursed expenses for classroom supplies for grades K-12. This includes things like:

• Books
• Art supplies 
• Software (computers, laptops, tablets) and related services (IT support) 

Keep in mind that health or physical education supplies like equipment only qualify for athletics. 

Similar to the student loan interest deduction discussed above, you do not need to itemize on your tax return to receive this benefit.

Tax Credits You Need To Know About Before April

Tax deductions reduce the amount of income you’re taxed on, while tax credits directly lower the amount of taxes you owe—both offering valuable ways to save, but in different ways. Next, we’ll examine tax credits in detail and introduce two key opportunities to help you optimize your savings.

Consider the Child Tax Credit

If you have dependents 17 years old or younger, you may qualify for the Child Tax Credit. 

This credit is designed to relieve parents and guardians financially by reducing their tax bill dollar-for-dollar. For 2024, the Child Tax Credit is worth up to $2,000 per qualifying child. Of this amount, $1,700 may be refundable if your tax liability is lower than the credit. This means that even if you don’t owe taxes, you could receive a portion of the credit as a refund.

However, the credit phases out for higher-income earners. For single filers, the credit begins to phase out at an income of $200,000, and for married couples filing jointly, the phase-out starts at $400,000.

Look Into The Child and Dependent Care Credit

In 2024, did you pay for child care while you worked or looked for work?

The Child and Dependent Care Credit is designed to help working parents and guardians offset the costs of childcare or care for other dependents while working, seeking work, or attending school full-time. 

The amount of the credit is based on the expenses you incur, and it can range from 20% to 35% of up to $3,000 in care expenses for one child (or $6,000 for two or more children). For taxpayers with an adjusted gross income (AGI) over $43,000, the credit rate is generally 20% of the allowed expenses.

If you support an aging parent, you may qualify for this credit. To claim your parent as a dependent, you must provide over half their financial support and ensure their income does not exceed the IRS limit (e.g., $5,050 in 2024). Eligible care expenses, such as in-home care or adult daycare, could qualify you for a credit of $600 to $1,050 for one dependent, depending on your income. Proper documentation is essential to claim these savings.

Additional Tax Best Practices

Not knowing this could cost you, big.

Helpful Reminder – Don’t Forget that Filing an Extension Does Not Extend the Time to Pay!

While an extension allows you extra time to file your taxes, it’s important to understand that an extension to file is not an extension to pay. Taxing authorities expect you to estimate and pay your tax liability by the April 15th deadline. This is because the extension to October 15th is only designed to give you more time to prepare your return—not to provide you with more time to pay. 

If you miss the April 15th payment deadline, you could face several potential penalties, which can add up quickly depending on the total amount you owe.

• Failure-to-Pay Penalty
• Interest on Unpaid Taxes
• Failure-to-File Penalty

Maximize Your Tax Deductions And Credits

Whether it’s through deductions or credits, understanding how to maximize tax deductions and credits can significantly reduce your tax burden. From contributing to retirement accounts like IRAs to making charitable donations, each decision you make can have a direct impact on your finances. 

But it’s not just about making the right moves—it’s also about staying organized, keeping accurate records, and being aware of deadlines. By staying informed and working with a tax professional when needed, you can ensure that you’re optimizing your tax benefits, saving money, and putting yourself in a stronger financial position year after year.

For more information, contact our experts today.

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