Which Tax Deduction Is the Most Beneficial? Let’s Break It Down

Financial Horizons: Insights for Building Wealth and Securing Your Legacy 

By Dr. Jose G. Cardenas, Chief Tax Strategist at The C & R Group, LLC

Every taxpayer wants to reduce their tax liability, but not all deductions are created equal. Depending on your financial situation, one deduction could be more impactful than another. The key is understanding how each works and which one best fits your circumstances.

Let’s take a closer look at four of the most common—and beneficial—tax deductions.

A) Mortgage Interest Deduction

For homeowners, the mortgage interest deduction can provide substantial savings, especially in the early years of a loan when most payments go toward interest.

• Deduction available on mortgages up to $750,000 (for loans after 2017).
• Encourages homeownership while lowering taxable income.
• Best suited for taxpayers who itemize deductions.

B) Medical Expense Deduction

If you’ve faced high medical bills, you may be able to deduct qualified expenses that exceed 7.5% of your adjusted gross income (AGI).

• Includes doctor visits, prescriptions, surgeries, and even certain travel for medical care.
• Can provide relief for families experiencing significant health costs.
• Requires careful documentation to support claims.

C) Charitable Contributions Deduction

Giving back pays off in more ways than one. Donations to qualified charities can be deducted if you itemize.

• Includes cash, property, and in some cases, mileage for volunteer work.
• For 2023, deductions generally capped at 60% of AGI for cash donations.
• Great for those who want to align their tax strategy with their values.

D) Student Loan Interest Deduction

For individuals with education debt, this deduction allows you to reduce taxable income by up to $2,500 in interest paid per year.

• Available even if you don’t itemize (it’s an above-the-line deduction).
• Income limits apply, phasing out for higher earners.
• Particularly helpful for young professionals early in their careers.

✅ So, Which Deduction Is the Most Beneficial?

The truth is—it depends. A family with high medical bills may benefit most from the medical expense deduction, while a homeowner with a large mortgage will find the mortgage interest deduction more valuable. Meanwhile, those paying off student loans or actively donating to charities can also see significant savings.

The real secret? Pairing multiple deductions strategically. With the right tax planning, you can maximize your deductions and minimize your liability—without leaving money on the table.

About the Author

Dr. Jose G. Cardenas is a retired U.S. Army Finance Officer and the Chief Tax Strategist at The C & R Group, LLC. With a Doctorate in Business Administration and over 20 years of experience in financial strategy, tax planning, and life insurance, Dr. Cardenas helps individuals and business owners protect their wealth and build a legacy. Learn more at www.thecrgroupllc.com.

📌 Disclosure:
This article is for educational and informational purposes only and is not intended to serve as personalized legal or investment advice. Dr. Jose G. Cardenas, DBA, provides tax advisory services through The C & R Group, LLC. Insurance strategies, including Indexed Universal Life (IUL) and annuity products, may be offered through his role as a licensed financial professional affiliated with Experior Financial Group.

📖 Read the full article: www.thecrgroupllc.com/blog
📅 Call today or book a consultation: Book a Call Here

#TaxPlanning #FML100M #ExperiorFinancialGroup