No one likes tax season. It’s a time of the year that’s stressful for many people because you don’t want to owe money and it’s time-consuming. However, there are many tax breaks available that many people overlook. By taking the time to find and implement these breaks, you can save money and perhaps even get a tax return from the government.
1. Charitable Donations
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This often overlooked deduction is a no-brainer. If you gave any monetary donation to a charity or non-profit organization, get a receipt. Or if you made food or donated food to a soup kitchen, keep the receipt. You can then write off these donations on your taxes. Also, it’s important to keep a small notepad handy on trips to any charitable event; you can write off the expense at 14 cents a mile.
2. Child Care Credit
If you have children, you undoubtedly are aware of the high costs of child daycare. However, you can receive a credit for these expenses on your taxes. The credit can actually be up to 35% of your qualifying expenses and you can use up to $3,000 of expenses paid in a year for a single individual or up to $6,000 for a joint tax filing.
3. Moving Expenses
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You might be aware that you can receive a tax break for moving expenses if you relocate for another job. This can be a large expenditure, especially if you are moving a large volume of items via car, truck, or train. Make sure to keep the receipts because this can be a sizable return. In addition to that, if you or your child is just about to finish college, you can get a tax break. If you finish college and get a job in a different city, this can also be deducted from your taxable income – a perfect break for the poor college student.
4. Medical Costs
In 2013, the IRS lets you write off medical expenses, but only if it tallies 10% of your gross adjusted income. While 10% is a rather high rate, make sure you dig deep into your expenses. Scour through your miscellaneous medical costs and even travel to and from medical facilities (hospitals, doctor, even alcohol and drug abuse facilities). This deduction is even more important for self-employed individuals. Because you aren’t covered by an employer’s plan, you can write off 100% of insurance premiums.
5. Retirement Savings
If you are trying to reduce your taxable income while also saving for retirement, look no further than IRAs. These retirement accounts, be it Roth or Traditional, you can literally put money right in your pocket. You can receive tax savings of 50% on the first $2,000 you contribute. If you don’t have an IRA, it’s worth investigating to see if it will help reduce your taxes.
These are just a couple of the bigger tax breaks that can help save you money. Do more investigating on your own and see if you can uncover more tax breaks that are to your benefit. If you’re unsure of what to do on your own, following tips from tax greats like Mark Weinberger will help you get ahead. So, make it easy on yourself this next tax season, and find some great deductions now so you’re ready for April 15.