You’ve heard of income verification.
You’ve probably heard of the FAFsa (Federal Income Tax Assessment) for those who don’t have the income.
But, are you aware that there are different types of income tax and deductions in the US?
And how much can you deduct on your taxes?
To help you answer these questions, we have compiled this income verification calculator for you.
It will help you determine how much you can deduct on federal, state and/or local taxes, as well as how much your deductions and credits can be.
For more detailed information, read our detailed income verification tax information guide.
What types of deductions can I deduct?
You can deduct up to $25,000 of interest and penalties for qualified charitable contributions, qualified charitable gifts, qualified student loan interest, and other qualified income.
You can also deduct up $1,000 for a qualified mortgage interest or qualified mortgage insurance.
You don’t need to file an income tax return to claim a deduction.
You can deduct your state and federal taxes as well.
What if I don’t qualify for a deduction?
You still have to file a federal income tax form if you’re under 65 and meet the age requirements for filing a federal tax return.
If you have a qualifying student loan, you can claim an income-related deduction of $1 for each $1 in eligible student loan proceeds.
You have to pay interest on this amount.
You cannot claim a federal deduction for qualified education savings accounts (ESAs).
You can claim a $10,000 deduction for any qualifying qualified education expenses.
You must file a separate income tax statement.
You have to claim the $25k income-based deduction on your federal tax statement if you are over the age of 65.
You do not have to make a federal or state income tax refund claim if you don’t meet the qualifying student loans requirements.
Your credit cards are not eligible for a refund if you pay off your credit card balances and have no outstanding balance.
How much can I claim on my taxes?
You may be able to claim up to 50% of your gross income for federal, individual, and business income taxes.
For example, if you earn $100,000 per year and pay $1.50 in taxes, you would claim $25 on your tax statement for each dollar you earn.
For a $100k income, you’d deduct $30, so you’d only have $2,500 left to claim.
For an individual, you only have to include 10% of taxable income (excluding interest) and 15% of qualifying interest (excluding mortgage interest).
For example: if you earned $200,000 in wages and paid $1 per week, you could claim up a total of $25 a week.
You’d only need to pay $200 per week for taxes.
For a business, you have to deduct 50% or more of the gross income (including interest) to claim all of the taxes you owe.
For instance, if your gross annual income is $1 million, you deduct $100 from your taxes to claim $1 billion.
You must report your adjusted gross income on your IRS Form 1040 to claim your federal income taxes as a business.
You may also be able for a state or local tax credit.
The amount of the credit depends on how much of your total taxable income is claimed.
For an individual who makes $50,000, the credit would be $2.50, for an individual making $200 and over $3.50.
For individuals making $1 to $15,000 the credit is $4.50 and for individuals making less than $1 you may be eligible for up to a credit of $4, but you must file your tax return for that amount.
If your state doesn’t allow you to claim an adjusted gross gross income credit, you must itemize deductions on your income tax returns.
If you itemize, you may also have to itemize state and national property taxes, which are separate.
You may be required to itemify your deductions if you have more than one qualifying child under the age.
What is a tax-deductible mortgage?
If you pay on a mortgage that is a qualified loan, the principal and interest on the loan can be deducted.
For each month the principal is paid, you’re required to deduct up-front interest from the mortgage.
For more information, see the mortgage deduction guide.