In a recent Yahoo Finance article, “Best Tax Deductions to Claim This Year,” Craig Toberman, CPA, CFP®, CFA, and Partner at Toberman Becker Wealth in St. Louis, shares guidance on how to approach filing and the deductions that can make the biggest difference for many taxpayers.
Though the best tax deductions depend on how you file, each year you get to choose between the standard deduction and itemizing:
"Since it [the standard deduction] nearly doubled in 2018 and now rises with inflation, the standard deduction quietly became a middle-class tax cut. This means millions no longer need to itemize to get meaningful tax relief."
After choosing your filing approach, you may want to review additional deductions and tax-saving strategies. IRA and 401(k) contribution deductions are a valuable option, Craig says:
“The retirement contribution deduction can be a very powerful planning lever because maxing a 401(k) can reduce taxable income in your high-earning years by over $20,000, while simultaneously funding future independence.”
“The student loan interest deduction helps at the margin, but it phases out quickly, so it often disappoints higher earners.”
Craig Toberman is a Partner at Toberman Becker Wealth – a fee-only, fiduciary financial advisor based in St. Louis. He assists families and businesses with strategic financial planning and long-term wealth management. He has over a decade of experience in financial services and has crafted custom financial plans for hundreds of families and businesses.