Adjustments to Income

If you’ve paid taxes a few times in your life, then you have probably heard of “adjustments to income,” which are also commonly referred to as “above the line deductions.” Basically, these are adjustments that you can take on the first page of your tax return. If you’re unsure about which adjustments to take, don’t guess! Get a tax professional to help you.  

While everyone is different and will qualify for different adjustments, some are certainly more common than others. If you’re like the average taxpayer, then it is very likely that you will qualify for one or even several of the following very common adjustments to income:

l  SEP-IRA, Simple IRA, and 401(k) deductions for the self-employed

l  Tuition and fees deduction

l  Student loan interest deduction

l  Early withdrawal penalties

Again, never guess or assume when it comes to these adjustments. Always make sure you are actually eligible for the adjustments you are claiming and that you factor them into your taxes properly! The best way to do this is with the help of a tax professional.

Also, make sure that you provide your tax professional with details about you, your job, and your overall life situation since, sometimes, different factors can make you eligible for other, less common deductions. Some less common types of adjustments to income that can sometimes be claimed include:

l  Classroom expenses for educators

l  Moving expenses

l  Alimony paid

l  Self-employment health insurance and half of the self-employment tax

l  Qualified performing artists and other professions

l  Domestic production activities deduction

These are just a few of many possible adjustments to income; a tax professional can help you to find all of the ones that apply to you and, even more importantly, can help you to use these adjustments to income to your benefit, so don’t delay in seeking professional assistance!