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Everyday people are tax exempt for a number of reasons, some of which are often missed by those who file taxes without help. Applying for your maximum amount of tax exemptions can save you from paying taxes on thousands of dollars a year. Below are four types of big tax exemptions that are overlooked by many everyday people:
1. Dependents Old and Young
As an everyday person, you're eligible for federal tax exemptions on yourself, your spouse, and any dependents you may have. Each of these exemptions is typically worth several thousand dollars in tax credits. A dependent includes any child under the age of 18, any unmarried child under the age of 24 who is enrolled in post-secondary education full-time for at least five months of the year, and qualifying parents or relatives who depend on you for their financial and physical well-being.
2. The Midwestern Disaster Tax Exemption
Anyone severely affected by a Midwestern weather disaster likely qualifies for a Midwestern Disaster Tax Exemption, which is equal to several hundred to several thousand dollars. This includes victims of tornadoes, hurricanes, and flooding who were displaced because of the severe weather.
3. State Tax Exemptions
The everyday person is tax exempt at the state level as long as certain qualifying terms are met. While these tax exemptions differ from state to state, they often include exemptions for people with physical disabilities, people who made energy-efficient improvements to their homes, and military service tax exemptions.
4. Other Tax Exemptions
The easiest way to ensure that you get your maximum tax exemption is to hire a professional accountant to files your taxes. Consider some of the people who are tax exempt from the following oft-overlooked reasons:
1. Dependents Old and Young
As an everyday person, you're eligible for federal tax exemptions on yourself, your spouse, and any dependents you may have. Each of these exemptions is typically worth several thousand dollars in tax credits. A dependent includes any child under the age of 18, any unmarried child under the age of 24 who is enrolled in post-secondary education full-time for at least five months of the year, and qualifying parents or relatives who depend on you for their financial and physical well-being.
2. The Midwestern Disaster Tax Exemption
Anyone severely affected by a Midwestern weather disaster likely qualifies for a Midwestern Disaster Tax Exemption, which is equal to several hundred to several thousand dollars. This includes victims of tornadoes, hurricanes, and flooding who were displaced because of the severe weather.
3. State Tax Exemptions
The everyday person is tax exempt at the state level as long as certain qualifying terms are met. While these tax exemptions differ from state to state, they often include exemptions for people with physical disabilities, people who made energy-efficient improvements to their homes, and military service tax exemptions.
4. Other Tax Exemptions
The easiest way to ensure that you get your maximum tax exemption is to hire a professional accountant to files your taxes. Consider some of the people who are tax exempt from the following oft-overlooked reasons:
- new baby - Parents of new babies born as late as December 31st in a year are tax exempt for that dependent for the entire year; parents of new babies also qualify for a number of tax credits.
- small businesses - Everyday people thinking of starting a small business but who are afraid of taking on as much debt as is needed to get the business running should see if their business would qualify for federal and state small business tax exemptions.
- tax credits and write-offs - Everyday people are tax exempt from paying taxes on a number of qualifying credits and write-offs, such as educational tax credits, state sales taxes, charity contributions, moving expenses, and child care expenses.
