When it comes to filing taxes, you try to identify every possible tax deduction that can help you save more money or maximize your tax refund.
Taxes can sometimes be very complicated. If you run a business, no matter big or small, make investments in shares/dividends or own a property, it is better to contact an income tax accountant. If you live in Anaheim or surrounding cities in Orange County, California, then Swift Tax is your one-stop solution for all your tax and accounting needs.
Tax Deductions That Can Help You Save More:
For your convenience, we present you with 10 income tax deductions that can help you save more:
1. Sales Tax:
If the state you are living in does not impose an income tax, then you can save big money with this deduction. Big purchases like a car, an engagement ring, home building materials need to be itemized to take the deductions. You can easily do that with the calculator IRS has on its website. It varies by your state and income level.
Beginning in 2018, the limit for itemized tax-deductible expenses will be $10,000 per year. But you will only be allowed to deduct either state and local sales tax or state and local income taxes but not both.
2. Charity Expenses:
Charity expenses are amongst the most helpful ones that let you save your money spent on good deeds. Not only the charities made are deductible, but the money spent on traveling to any charitable trust also works as a saver on your tax liability. Even the money spent on buying stamps for a school fundraiser count as a charitable donation.
Don’t forget to take a receipt of your charity donations
3. Moving Expenses when Relocating for a Job:
If you are leaving your hometown and shifting to some other city to get your first job, you are eligible to claim for the expenses incurred while moving there. However, the money spent on searching for that first job comes under tax liability and does not offer any rebate.
4. Paying for Pre School and Baby Sitting:
If you are sending your kids to a preschool/daycare or taking services of a babysitter so that you can work or volunteer to work for a no pay charitable organization, then these expenses definitely make their way into your tax deductions.
To qualify for this deduction:
• Your child must be under the age of 13 or must be disabled mentally or physically and are not able to take care of themselves on their own
• The child care provider should not be your spouse, dependent or child’s parent.
5. Reinvested Dividends
Many taxpayers overlook this tax expense while calculating their income taxes which then costs them millions in overpaid taxes.
Reinvested dividends is an equity investment option where your mutual fund dividends are automatically invested to buy extra shares. Each purchase will increase your “tax basis” in the fund and reduce your taxable capital gain when you sell your shares.
If you forget to include your reinvested dividends as your deductible expenses then you are overpaying your taxes. At Swift tax, we deal with all these kind of tax expenses. We take care of all the calculations and make sure you get credit for every dime you reinvested.
6. Benefits for Teachers:
Teachers who spend on their students and other classroom items are recognized by the taxation and revenue department. Qualified K-12 teachers can take a tax advantage of up to $250 for materials they use for their students or classrooms. This amount will be subtracted from their income.
7. Keep Learning:
Education not only helps you forge a secure and bright career but also reduce your taxable payments. Lifetime learning can provide you tax rebate of up to 20 percent, not including the high-income groups.
8. Expenses on Tax preparation:
Money spent on tax preparation can also help in your tax liabilities. The money that you spent on tax preparation last year can be claimed in the tax deductions for the following year.
9. Legal Bills:
Yes, you read it right. Legal bills can also reduce your taxes. If you took the services of any legal advisor a couple of years back, but for which you paid to clear the dues this year, you can claim tax deductions on this payment
10. Health Insurance Premiums:
When it comes to medical expense, IRS really cares. If your medical expenses have exceeded 7.5 percent of your adjusted gross income then you can claim it as an itemized deduction for the tax year 2018.
However, if you are self-employed and manage health insurance premiums on your own, then you might be able to deduct 100 percent of your premium cost.
Call us today at 714-408-2786 to ensure you don’t miss any income tax deductions or credits you deserve for the Tax year 2018. We help to maximize your Tax refund as much as possible.