There are two types of people when it comes to filling taxes. There are always the people who are well prepared and have everything in a filing cabinet of all the receipts, expenses, incomes etc. ready to use for their tax return so they can get the most out of their return, they are usually the people who get their taxes done quickly way before the deadline. And then there are the individuals that do not have any preparation with their taxes. They have no records, and will procrastinate the whole tax process each year. No matter which way you fit into there are many easy tax deductions that can maximize what you will be getting back. Here are some great ways to get the most out of what you deserve this tax season.
This is an area that makes most sense for individuals residing in a state that does not have a income tax, although any tax payer in the United States can use this deductions whether or not it will be advantageous. When doing your taxes you must choose between deducting state and local income taxes or state and local sales taxes. In an income tax state the income tax imposed is usually a large hit to your wallet than the actual sales tax so in this case the income tax would be the way to go. One of the best ways to see what way makes the most sense is to is to visit the IRS webpage. The webpage has various sets of information that will show how much residents of specific states can deduct. As an example is you made some purchases this year such as a boat, car, or motorcycle, the sales tax you paid for one of these items can be added to the amount that is shown on the IRS website. This way the sales tax amount that was paid will not exceed the states normal sales tax amount.
Another great example of this is if you decided to add on a garage to the side of your home, because of this you had to purchase many building materials that are not to be overlooked on your taxes. This alone could make the sales tax deduction an even better way to go, and this is even living in a income tax state. This all various by state to state and individuals situations but this is something very worth looking into before doing your taxes this year.
This is what they call a tax subtraction which can save you more money on your return. The IRS has stated that a lot of taxpayers do not take advantage of this subtraction. If you have a mutual fund then read on. Most mutual fund investors who receive who receive dividends automatically have them reinvested back into the market to buy more shares of stock, by doing so the investments increase your tax in the fund. What this will do for you is to reduce the capital gain whenever you decide to sell your shares. If you are to not include the reinvested dividends then you will suffer a double taxation on these reinvestments. This is a huge mistake that can cost you, the best way to make sure this does not happen is to ask your fund manager for help in this area.
If you do not know already making contributions to charities or other ways of helping the needy can really make a big difference in your taxes each year. I personally recommend that you find ways to give back and at the same time reap the rewards of tax benefits. Of course we should all be aware of when we make a monetary donation directly to a charity this is a qualified deduction but you need not forget about the other ways we can save. Let us say that you decided to go to the homeless shelter to share your fantastic skills or making pulled pork and you would like to share your great food with the shelter for the day. All of the ingredients and food you purchased for this charity are able to be deducted. The important things here is to keep your receipts as you want to hit the magic number for contributions, this number is $250.00. Keep in mind you will also need documentation from the actual charity or organization acknowledging your actions and expenses. Do not forget that simply driving to the charity for cooking that pulled pork will also allow you to deduct 14 cents per mile that is driven to the charity.
Another great way to save is to go in your house and gather everything you do not want anymore. Itemize it and donate it to a Good Will or other similar donation center. They will provide you with a donation acknowledgement that you can use for your taxes. In my opinion you will get more money out of that junk donating it and reaping the tax benefits than you would actually selling the items individually, not to mention the ease it is to simply drop off the good and be done with it rather than holding a garage sale that most likely will not sell everything.
If you are a student and have some student loans that need to be paid you can find more deductions! Lets say that you are lucky enough to have parents that would like to help you out and end up paying off your loans or help you pay the loans. As long as you are not listed as a dependent by someone else the IRS considers the money given from your parents to pay off the loan as if it was given to you. This way you can qualify to deduct up to 2,500.00 of student loans interest being paid! Unfortunately if you are a parent doing this for your child you can not claim anything with this nice gesture as the loan is not considered to be your debt.
In this tough economy there are millions of people without jobs. If you are working hard to find a job right now and spending money to aid in your search than the IRS will cut you a break. You can deduct Job finding expenses as miscellaneous expenses. You can look at deducting for the travel, room, and food if your job search takes you away from home in order to conduct interviews and meet with prospective employers. You can also deduct the cost of job agencies if you elected to partake of their services. And we all know that you have to print out lots of resumes and other marketing materials for yourself to help land a job, this is also deductable on the costs involved with this.
Income-tax-calculator.org is dedicated to keeping you informed on what you can do to get the most out of your taxes and take the headache out of doing them each year. Check back in for more great info.