Unless you are fortunate enough to be one of the super-rich, you are always looking for ways to save money. When it comes to taxes, even the super-rich are interested in paying the least amount possible. Each year we must pay our taxes, and for many there is a refund involved. But paying taxes is a tricky business and sometimes you may not be taking advantage of certain deductions that may apply to you. The Government gets enough of your money already so there’s no need to cheat yourself in their favor.
Did you know that some of your sales taxes may be deductible? If you itemize your taxes you may be able to include taxes paid on large items.
Health insurance premiums may be deductible, especially if you’re self-employed. You can also deduct medical expenses if they exceed 7.5 percent of your adjusted gross income.
If you are one of those teachers who purchases items for the classroom using money out of your own pocket, it can be deductible. The IRS allows qualified K-12 educators to deduct up to $250 for materials. That gets subtracted from your income, so you can take advantage of it even if you don’t itemize.
There are conditions under which you can deduct the cost of a babysitter. If you do volunteer work and have to pay a babysitter while you’re doing the volunteer work, it may be deductible. The federal Tax Court has ruled that it’s OK to list the cost of a babysitter as a charitable contribution on your return.
Those who are self employed are well aware of having to pay 15.3 percent of your income for social security and Medicare taxes. There is however a consolation in that you do get to deduct the 7.65 percent employer portion off your income taxes.
Not too many people have the time to go through the complex tax code looking for deductions, so it may pay off to seek the advice of a professional.