Medical Expenses, Certain medical expenses that exceed a certain percentage of your income can be deducted. These can include medical and dental expenses, prescription medications, and even some health insurance premiums.
4. Education Expenses, If you’re furthering your education to improve your skills in your current job or pursuing higher education, certain education-related expenses might be deductible. This can include tuition, books, and even certain travel costs.
5. Charitable Contributions, Donations to qualified charitable organizations are typically tax deductible. Keep records of your donations, whether in cash or non-cash items, to claim these deductions.
Capital gains tax is a vital aspect of the taxation system, impacting individuals who earn profits from the sale of assets such as stocks, real estate, and other investments. It’s crucial to have a clear understanding of how capital gains tax works, as it can significantly influence your financial planning and investment decisions. In this guide, we’ll delve into the basics of capital gains tax, its classifications, and strategies to manage its implications.
Defining Capital Gains, Capital gains refer to the profits earned from selling assets at a higher price than the original purchase price. These gains can be realized through various investments, including stocks, bonds, real estate, and collectibles.
Short-Term Capital Gains: Profits from the sale of assets held for one year or less are considered short-term capital gains. These gains are typically taxed at higher rates, similar to ordinary income tax rates.
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