Everyday Law & Life

If you're paying off student loans, there's a bit of good news: You may be able to deduct up to $2,500 in student loan interest on your federal tax return. Here’s how the deduction works, who qualifies, and what to watch for. 🎓 What Is the Student Loan Interest Deduction? It’s an “above-the-line” deduction , meaning you can claim it even if you don’t itemize . You can deduct: Up to $2,500 per year in interest From qualified student loans used for education expenses ✅ Who Qualifies? You must: Have paid interest on a qualified student loan in the tax year Have a Modified Adjusted Gross Income (MAGI) under certain limits: Full deduction if MAGI < $75,000 (single) or $155,000 (joint) Phases out above that You cannot be: Claimed as a dependent Married filing separately 🧾 What Is a Qualified Loan? Loans taken out solely for qualified education expenses Borrowed for you, your spouse, or a dependent From a legitimate l...

Which Homeowner Tax Deductions Can You Claim in the U.S.? Owning a home comes with more than just pride and monthly payments — it can also bring significant tax savings. Here are the top homeowner tax deductions you may qualify for in the U.S., and how to make the most of them. 🏡 1. Mortgage Interest Deduction If you itemize your deductions, you can deduct: Interest paid on a mortgage of up to $750,000 (for loans taken after 2017) For older loans (before Dec 15, 2017), the limit may be $1 million Applies to your primary residence and second home 🏠 2. Property Taxes You can deduct up to $10,000 ($5,000 if married filing separately) for: State and local property taxes This is part of the SALT (State and Local Tax) cap 💰 3. Mortgage Insurance Premiums (PMI) If your income is below certain thresholds, PMI may be deductible: This includes private mortgage insurance, FHA mortgage insurance, and VA funding fees Deduction phases out for higher-in...

What Is a 529 Plan in the U.S.? Tax Benefits and How It Works Saving for a child’s college education can be overwhelming — but a 529 plan can make it easier and more tax-efficient. Let’s break down what a 529 plan is, how it works, and why it might be the smartest way to save for future education costs in the U.S. 🎓 What Is a 529 Plan? A 529 plan is a tax-advantaged investment account designed to help families save for education. Sponsored by states or educational institutions Earnings grow tax-free Withdrawals for qualified education expenses are also tax-free 💼 What Can It Be Used For? Qualified education expenses include: College tuition, fees, books, supplies Room and board (if enrolled at least half-time) K-12 tuition (up to $10,000/year) Student loan repayments (up to $10,000 lifetime per beneficiary) Some apprenticeship program costs 💰 Tax Advantages Contributions are not deductible on federal taxes But earnings grow tax-fr...

What Is Self-Employment Tax in the U.S.? A Guide for Freelancers and 1099 Workers If you're self-employed or earn income as an independent contractor, you’re not just responsible for income tax — you also owe self-employment (SE) tax. Here's what it is, how it works, and how to stay on top of it. 💼 What Is Self-Employment Tax? Self-employment tax covers: Social Security (12.4%) Medicare (2.9%) Total: 15.3% of your net earnings Employees split this with their employer — but as a freelancer or 1099 worker, you pay the full amount yourself . 📄 Who Pays SE Tax? You must file if: You earned $400 or more in net self-employment income You’re a sole proprietor, freelancer, independent contractor, or gig worker You received income reported on Form 1099-NEC or 1099-K 💡 How to Calculate It Calculate net earnings from self-employment (gross income – expenses) Multiply by 92.35% (the IRS-approved portion) Apply the 15.3% SE tax rate ...

Why Is My Tax Refund Delayed in the U.S.? Common Reasons and What You Can Do You filed your tax return, waited patiently... and still no refund. You’re not alone — millions of Americans experience refund delays each year. Here are the most common reasons why your IRS refund may be delayed, and what you can do to check or speed up the process. 🕒 1. Your Return Is Still Processing Even if your return was e-filed, the IRS can take up to 21 days (or longer) to process: During peak season (Feb–April), delays are common Paper returns take much longer 🧾 2. Errors or Incomplete Information Simple mistakes can cause red flags: Wrong Social Security Number Incorrect income amounts Missing forms or mismatched info IRS may hold your refund until corrected 🧍 3. Identity Verification Needed If your return triggered a fraud alert: IRS may require ID verification You’ll receive Letter 5071C, 6331C, or 4883C Refund will be paused until you verify you...

Can You Deduct Medical Expenses on Your Taxes in the U.S.? Here's What Qualifies Medical bills can add up fast — but did you know that some of those expenses may be deductible on your taxes ? Let’s explore when and how you can claim medical expense deductions in the U.S., and what qualifies under IRS rules. 🧾 What Is the Medical Expense Deduction? You may be able to deduct qualified unreimbursed medical expenses — but only if you itemize deductions on your tax return. 🔍 They must exceed 7.5% of your Adjusted Gross Income (AGI) to be deductible. 💡 Example: AGI: $60,000 7.5% of AGI = $4,500 If your out-of-pocket medical costs = $7,000 → You can deduct $2,500 on Schedule A ✅ What Medical Expenses Qualify? You can deduct: Doctor, dentist, surgeon, chiropractor, psychiatrist fees Hospital services & nursing care Prescription medications & insulin Health insurance premiums (if not employer-paid) Long-term care costs Medical eq...