Welcome to Dollar Loan Center Tax Tips
Here are a few tax breaks that individuals typically miss.
Don’t pay more taxes than you need to.
People say this all the time, but it can be hard to find every deduction, credit and income adjustment you are entitled to.
You might be aware of the most widely used deductions, according to the IRS:
- Local and state taxes
- Gifts to charity
- Home-mortgage interest
- Tax-preparation fees
- Dental and medical expenses
But are you getting the most you possibly can out them? Let’s discuss the most-often overlooked, forgotten and ignored regulations and tax breaks.
- State Sales Tax Option
You might not realize that you’ve got the option of deducting state and local sales taxes – Until roughly 10 years ago, people didn’t get that option. If you paid sales tax and not state income tax, you’re caught with no deduction.
Congress acknowledged the problem and granted taxpayers to select from deducting their state and local income taxes or their state and local sales taxes.
If you reside in a state that has a state income tax, you’re probably better off deducting the state income tax.
However, in the event you purchased a car, boat or airplane, you can add that to amounts the IRS calculates in their sales-tax deduction calculator.
Also, do you own an automobile? A boat? State personal property taxes on cars, boats along with other personal property are deductible on Schedule A. The IRS warns the taxes have to be based upon value only and imposed on a yearly basis. For instance, the majority of drivers pay out an annual fee for car registration. If a part of the fee was based upon the car’s value and part was based upon its weight, you are able to deduct the value-based part of the registration fee.
- Charitable Contributions
If you itemize, don’t forget to deduct the amount of money and items you’ve donated to charity and don’t overlook other costs you accumulate on behalf of your preferred qualified charity.
Let’s say you volunteer every week at a soup kitchen. You don’t get a deduction for your personal time, however, you can deduct the expense of getting there and back. When you drive, deduct 14 cents per mile plus parking and tolls paid.
Perhaps you prepared food for the organization. The cost of the ingredients are usually tax deductible.
Keep your receipts! Should your contribution total over $250, you’ll need an acknowledgement from the charity showing the services you offered.
The IRS reports these travel expenses regarding charities could be deductible:
- Air, rail and bus fares
- Out-of-pocket expenses for your car
- Taxi cab fares
- Medical Expenses
Visiting the doctor might not be enjoyable, however it may ease your pain if you know getting there most likely is deductible.
If you’re itemizing for 2016, the IRS says, you are able to write off 19 cents a mile if you used your automobile for health-related reasons.
You can deduct just the amount of your dental and medical costs that’s over 10 % of your adjusted gross income (7.5 % if either you or your spouse were born before Jan. 2, 1952).
Apart from your share of the real cost of doctors, diagnoses and dealings with physicians, you can also include in medical expenses the cost of meals and lodging at the hospital if your main reason behind being there is to get medical care.
- Child and Dependent Care Credit
Here’s a bonus tip that is overlooked largely in the younger age bracket…Child and Dependent Care Credit.
Are you paying someone to watch your kids so you can work, or search for work? You might be eligible to claim the Child and Dependent Care Credit. The credit, which could reduce your tax bill faster than the usual deductions, this can also help if you are living with an elderly parent or perhaps a disabled spouse whose care has to be taken care of while you work.
Additionally you may be able to claim the credit for summer day-camp expenses for your children if you choose a camp specifically so you can work. The credit limit is $3,000 for one eligible person or $6,000 for 2 or more individuals.
If you have any questions when filing your taxes this year, don’t hesitate to contact the IRS directly at 800-829-1040 or stop into your local IRS office to get assistance.
Thanks for watching Dollar Loan Center Tax Tips.
Parts of this article were originally posted on moneytalksnews.com