During tax time, there are many things that you have to keep in mind. You need to be able to handle all the changes that occur in tax law each year. Most people are spending time worrying about how to reduce their tax bill without doing anything wrong. Just waiting for all the paperwork to come in and ensuring that you have it all in order is enough to give you a headache by the time taxes are done.
One way that you can save some money when it comes to your taxes is by finding all the best tax deductions that work for your needs. There are many of them that you can choose, varying from child care credits, medical expenses, and even mortgage interest payments. These can get expensive through the year, but with the right tax professional helping you out this tax season, you will be able to get as many deductions as you qualify for and save a ton of money on your tax bill this year.
Medical Expenses
There are some medical expenses that you are able to deduct. If you spend more than 10 percent of your income on medical expenses, you will be able to deduct a certain amount from your taxes at the end of the year. If you need to get breast pumps or supplies after having a baby or you are in charge of taking care of the batteries for your hearing aids, you could get this reduced as well. If you need to make some changes to your home, such as new siding because of health problems due to mold and adding in some additional features because someone in your home as a handicap, you may be able to get these reduced on your tax return.
Figuring out the medical expenses that you qualify for can be a challenge. You have to keep in mind that there are some things that you can’t deduct, but there are also a surprising amount of items that are deductible on your tax return. Take the time to talk to your tax professional to find out if you are able to deduct any of your medical expenses when it comes time to work on your tax return.
Children
There are a number of deductions that you can get when you have children. Just having a child and being able to claim them on your tax return will automatically give you a deduction at the end of the year and this deduction is per child. If you are married and filing jointly, you will be able to have both parents claim the children. If you are filing separately at all, you will need to discuss which parent is going to put the child on their tax return.
In addition there is also a deduction for any child care costs that you may incur throughout the year. The type of child care can vary, but you do need to have the proper receipts in place and ensure that you are able to prove that your child did in fact go to a specific daycare during the day.
Sales Tax
If you are good at keeping track of your records, you could reduce some of the sales tax that you are paying for throughout the year. There are a lot of situations when you will pay sales tax, but most of the time, keeping track of every receipt that you had during the year is going to be a big challenge. This is why most people will choose to just keep track of the big expenses and the sales tax they paid on this. For example, if you bought a new car you could deduct the sales tax on that big item and not worry about all the smaller items.
Make sure to discuss this deduction with your tax professional. There are a lot of things that you have to keep in order to get this deduction and not all of your sales tax is going to qualify. Consider keeping all of the receipts and discussing whether or not you qualify for the exemption before trying to claim it at the end of the year.
Student Loan Interest
For those who have gone to school and are now paying off their student loans, it is possible to get a deduction from this money. You will need to be able to prove that you made these payments, but the loan company you borrowed from will send out the paperwork to make this easier along with information on the amount that you paid specifically to your interest. Keep in mind that you can only claim the amount of interest that is paid, and there are limits, usually up to $2500, for the amount that you can claim. Even if you spent more during the year on just interest, you will not be able to claim more at the end of the year.
Finding the best deductions is one of the best ways to save a lot of money at the end of the year. It helps you to lower your tax bill and keep more money in your pocket compared to other sources. If you need help finding the deductions that work the best for you, make sure to contact a local tax professional in your area to help you get started right away.
