The Internal Revenue Service doesn't offer any deductions exclusively to the middle class, although there are income limits on some deductions. Instead, middle class tax deductions are those that people in the middle class are most likely to be eligible for. Wealthy people are more likely to have significant capital gains, but middle class tax payers tend to have smaller capital gains, if any at all. Other tax deductions, however, including those for employees and small businesses, can help members of the middle class reduce their tax burden.
If you own a small business or incur expenses as a part of your job, you can deduct most of these items: supplies for work, employee payroll costs, work uniforms, work-related travel and professional license fees. You can deduct these expenses only if they exceed 2 percent of your adjusted gross income, but for many middle class workers, these deductions can help lower tax liability.
The child tax credit reduces your tax bill, rather than reducing your taxable income, and offers a $1,000 per child credit until the child is 17 years old, as of publication. If you have a dependent child younger than 12, or a dependent of any age for whom you provide care, you are eligible for a credit of 35 percent of the cost of child care, up to a maximum $6,000. You can't pay your spouse for child care, and you must work during the year in which you claim the credit.
Your health care expenses, as well as your child's health care expenses, are tax deductible. These expenses can include the costs of delivering a child, medical tests, some medical equipment, dental care, surgery and prescription drugs. You can also deduct the costs of your insurance premiums. In 2011, the IRS expanded the deduction to allow nursing mothers to deduct the costs of breastfeeding supplies such as breast pumps.
Mortgage Interest Deduction
Many middle class families still rely on their mortgage interest deduction to lower their tax burdens, and this deduction encourages some families to buy a home. You're only allowed to deduct interest on the first million dollars of home debt, which means that middle class families might end up deducting more of their total interest than wealthier homeowners.
- Bankrate.com: 5 Tax Deductions That Favor the Rich
- MSN Money: 10 Big Deductions Too Many Of Us Miss
- Kiplinger: Tax Breaks for the Middle Class
- Atlanta Blackstar: Great Tax Benefits for Parents in 2013
- Internal Revenue Service: Publication 502 -- Main Content
- The New York Times: Breast-Feeding Supplies Win Tax Breaks from IRS
- Time-Standard: Understanding the Mortgage Interest Tax Deduction
Van Thompson is an attorney and writer. A former martial arts instructor, he holds bachelor's degrees in music and computer science from Westchester University, and a juris doctor from Georgia State University. He is the recipient of numerous writing awards, including a 2009 CALI Legal Writing Award.