Secrets to Lowering Your Tax Bill
Know the Tips to Save Funds On April 15
Everybody wants to save some money. And one time when everyone either has to pay – or get paid by – the federal government is tax time.
A tax bill can be a big inconvenience, but with these tax-saving tips, you can lower your tax bill and use your hard-earned money on important expenses. There’s a variety of ways to lower your tax bill by using these tax tips.
If your car is used for business purposes, you can write off your automobile expenses and lower your bill at tax time. Make sure to keep records of any toll and parking fees you’ve paid, along with fuel and oil costs, tires, and mandatory expenses like insurance and registration. These costs have to be attributable toward your car’s business activities, like driving to a client meeting. Everyday expenses for commuting won’t count toward a deduction.
Avoid Common Tax Errors
Making simple mistakes on your tax returns can draw the unwanted attention of an IRS agent. Some mistakes can result from taxpayers making “iffy” deductions, so don’t take out a deduction unless you’re on solid footing. If you understate your income, you can draw the IRS’s ire by warranting a second look. That can increase your tax bill by having the IRS increase your total income. So, remember the old adage: honesty is the best policy.
Deduct Expenses for Job Hunting
If you’re currently in between jobs, or were within the last tax year, you may be able to deduct your job hunting expenses. Expenses for resume services, headhunter fees, and job placement services can be deducted. The cost of printing and mailing your resume can also be written off, as well as transportation and travel costs incurred for going out of town for a job interview. But be careful: travel costs have to be strictly job seeking-related, and not personal.
Keep Your Dinner and Travel Receipts
Deducting food and entertainment expenses is possible if they’re business-related. The main purpose of the expense has to be business-related. There’s certain requirements: a client or customer must be present, and there’s a good chance you’ll be asked what business was discussed over lunch (so write it on the back of the receipt).
Make Health Care Reform A Tax Advantage
The Affordable Care Act was a big change to the U.S. health care system, and the impact on the tax laws left a sizable footprint. Using it to lower your tax bill is a smart way of using it. If you run a small business, using the Small Business Health Care Tax Credit is one way to lower its tax bill. It covers up to 35 percent of the total healthcare costs paid by small businesses, and is set to rise to cover half of these costs in 2014.
Don’t Forget About Charitable Donations
Your good works supporting a charitable organization can go toward lowering your tax bill. These write-offs can stem from the supplies or gifts bought for a charitable fundraiser, or the miles driven to and from that Habitat for Humanity construction site (or any other charitable location).
Lowering your tax bill can be an art – if you know what tax-lowering opportunities are doled out by the tax code.
How do you save when it comes to tax time? Comment below or tweet us @StopIRSDebt.