It’s tax time.
And just like with any other successful endeavor in life, a strategy helps! We didn't say it makes it fun. There's really no way to make taxes fun. So get over it and just get it done. To help ease the pain a little we want to remind you of some deductions that our generation tend to overlook. These might help you claim more deductions and in turn, GET MORE MONEY BACK - and that on the other hand, is fun!
Now that we have your attention:
1) Charitable Gifts & Charitable Work Expenses – We often remember to deduct financial donations we’ve given to charities but did you know you can also deduct expenses you incur while doing charitable work. Supplies bought for a volunteering group, use of your vehicle for charitable work (deducted at 14 cents a mile), cost of a uniform if required, or dry cleaning after.
2) Moving expenses - When you relocate for a job more than 50 miles you can write off your moving expenses. However, did you know you can also write off moving expenses for your first job. A recent college graduate who gets a first job away from where you have been living is eligible for the deduction as well.
3) Job Search Expenses - The costs incurred while looking for a new job such as resume preparation, outplacement services, transportation to/from interviews, etc can all be deducted. Unfortunately, you cannot deduct the costs associated with looking for your first job - sorry college grads!
4) Child Care Credit & Camp Deduction - Many parents use the child care credit to help cover costs of after school day care. But it’s easy to forget that the tax break applies to summer day camp costs too. It has to be a summer day only camp that supervises the child while the parents are at work.
5) Education Expenses – Tuition and fee deductions can help you take up to $4,000 off your taxable income. The lifetime learning credit could provide some students (or parents) up to a $2,000 credit. Then there is also the American Opportunity tax credit which provides a dollar for dollar tax break up to $2500 through 2017.
6) Energy Efficient Home improvements – Check with your tax professional as some of these deductions expired in 2013, but there are still several you can take advantage of if you made improvements in your home to make it more energy efficient.
7) Savers Credit – Depending on your income level you may be able to get a tax credit for up to 50% of the first $2,000 ($4,000 if filing jointly) you put into a retirement account. What’s great about this credit is it directly reduces dollar for dollar any taxes you owe.
8) Business Owner Expenses - If you are a self-employed business owner, you can deduct quite a lot including a portion of your rent if you use part of your apartment strictly for business activity. It's called the home-office deduction. Other items include office supplies & equipment, phone/internet bill, health insurance premiums & contributions to a retirement plan in your name.
9) Gambling Losses - Take any trips to AC last year? If you ran out of beginners luck and ended your evening in the hole, the government allows you to take a dollar for dollar deduction of your losses up to but not exceeding the amount that you won. So if you won $500 but lost $1200, you can claim a $500 loss. That's something!
OUR BEST ADVICE
BE ORGANIZED - Handing your accountant a box of receipts is undoubtedly not going to get the same attention as a nice document you create summarizing your expenses. Take the time to write them down, add them up and summarize everything. We guarantee your account will work much harder to help you.
As always, it's important to consult a tax professional, especially as you get older and your situation gets more complex. Also, you can maximize your refund (or reduce what you owe) if you have a qualified financial advisor working with your accountant throughout the year. As a team, they can help to maximize any and all tax benefits you may be eligible for.
That's all for now. We're gonna stop here and let you get to it because the quicker your get this done, the sooner your tax refund (hopefully) arrives in your mailbox. Best of luck and we're here if you have any questions!