It’s almost that time of the year. The time where you get to pay Uncle Sam. I personally use TurboTax to do my own taxes. It’s super easy and works like magic. It shows an awesome display of your total amount of money owed, or going towards you and will change in real time each time you adjust your numbers. I’ll give you some quick deduction tips which I’ve learned over the past few years which end up saving me a TON of money and give me quite the deductions. Without further ado, let’s get started!
Save Money On Taxes
1. Self-Employment Deductions: Being self-employed puts you in the paradise of tax deductions. You can save tons of money when your self-employed, unlike working for an employer which can have some deduction restrictions. As a matter of fact, most of the following money saving tips regarding taxes which you will find in this article are all worth gold for freelancers and people who are self-employed.
2. Car Mileage: When you’re self-employed you can deduct a ton of car miles. Just make sure to keep track of your trips, destinations, receipts and anything else related to travel for work purposes. That way it’ll be easy to add up all of your deductions in April.
3. Entertainment While Taking Clients Out: If you’re self-employed, you’ll be able to deduct most if not all of your entertainment expenses. That means you’ll be able to get deductions when you take clients out for drinks, food and sometimes even the movies or a theme park. This because those events are business related and needed for you to establish your self employment relationships and possible work offers.
4. Meals And Travel Business Related: All of your meals and travel arrangement which are related to your self-employment business can be deducted from your tax statement. Sometimes you could even deduct the miles you drove towards a place where you would get food. Though it starts getting tricky there. I don’t do this myself, but I’ve heard some people do it.
5. Business Gifts: If you ever purchase gifts for clients or any other business related relationships, you’ll be able to deduct those expenses from your taxes. Again, like our “Work Travel Receipts” manilla envelope, if you end up taking out a lot of clients or buy a lot of gifts, I would be very helpful to create a separate manilla envelope for these categories. This will only make things easier the closer you get to April.
6. License Fee Car Registration: Plain and simple. You’ll be able to deduct your car registration expenses from your taxes. That’s about it when it comes to DMV though.
7. Alimony Deduction: You can deduct your alimony even if you do not itemize deductions on your income tax return. You can deduct your alimony by using the 1040 form.
8. Car Maintenance: All of your maintenance done to your car could be eligible for a tax deduction. It gets kinda tricky if you use that same car for personal use on top of work. That’s why a lot of companies will hand out company cars or some people simply have two cars. The same can be said about having 2 different phones. One phone can be tax deductible, though if you use one phone for work and personal, it could get tricky.
9. Having kids: Simply having kids will make you eligible for a specific tax deduction dedicated to parents.
10. Medical Expenses: Your medical expenses need to be over a certain percentage related to your income for it to make a difference and tax deductible. A few years ago, the percentage ratio was 7.5%. I recently heard it went up to almost 10%. If that’s the case and you made 100k you will only be eligible for tax deductions starting after the first $10k expenses. So basically you need to have a pretty bad year for it to count. The more you make, the less likely you’ll be able to write anything off. However if you’re really poor or don’t make that much money at all, you could really use this deduction if something really bad happens.
11. Charity Deduction: All of your charity donations can be tax deductible.
12. Tax Preparation Deduction: All of the fees and expenses related to your tax preparation work could be tax deductible. Though I personally advise and use TurboTax. So easy to use, you’ll learn how to do your own taxes and you can be creative as you want when it comes to deductions. Still within reason though.
13. Attorney Fees Related To Work: Any attorney fees related to your work could be eligible for a tax deduction. This could easily go from immigration attorneys preparing you to work, to any other type of attorney.
14. Child Support Deduction: The law says you can’t deduct child support, though I have heard people say they have done it. How? I do not know because I do not pay child support, but it may be worth looking into more if you do.
15. Teacher Expenses Write Off: School supplies and any other expenses made by a teacher could be tax deductible.
16. Job Related Moving Expenses: Any expenses made because of job relocation can be deducted from taxes.
17. Owning A Home: Interest on your mortgage could count for a tax deduction.
18. Property Tax Deduction: You’ll have to look into this a little more, but some people are eligible for a property tax deduction. since I don’t own a home I’m not really 100% sure, but I’ve had a handful of conversation about this with people who did use that property tax deduction.
There you have it. I’m sure there are a ton more ways to save excessive amounts of money when it comes to taxes, but for now these tips will have to do. Feel free to comment in the comment section down below and add other tips you’ve learned over the years to save some extra money on tax day!