Sources Of Tax Deductions
Sources Of Tax Deductions
Taxes are expensive! And though we don’t mind paying “our fair share,” everyone is happy when they find a way to reduce their taxes. One of the simplest ways to reduce the taxes you will owe is to have items that qualify for tax deductions. As long as you
Donating To A Charity
Donations to established non-profit organizations qualify for a tax deduction. Be sure to get a receipt for your donation in case you are ever audited. It needs to state the name and address of the organization, what you donated (money, items, car, etc.) and the value that the company claimed for it. If you donate thrift store value items at a place that has no representative standing by to give you a receipt, write up specifically what you donated, the date, and the number of the drop-box if there is one, or the location of it.
Donations can be in cash or as items to be sold or used for the less-fortunate, like clothing, toys, shoes, blankets, etc. They can also be “boats, cars, RVs” as we’ve heard on the radio. These companies take your vehicle and give you the Blue Book value for their vehicle, either all as a tax deduction, or sometimes half in cash. Sometimes you can designate to which organization you want your contribution to go – whether the American Heart Association, the Federation for the Blind, La Leche League, or another qualified non-profit organization.
Medical Expenses
Some medical expenses qualify as tax deductions. Be sure to keep track of them throughout the year, retaining receipts for doctor visits, prescription medicines, and other qualifying items. All of these can be added together to go on your tax deduction form.
Child Care Expenses
Child care can be a very expensive, ongoing, expense. If you’re a parent of young children, unless you have a willing parent who doesn’t mind being on “grandma duty” every time you need it, you will likely have child care expenses. Most child care expenses are for when the parents are at work, and will be in the form of a day care (whether in an in-home or freestanding day-care facility) or an after-school program.
Business Expenses
Some business expenses qualify for a tax deduction. You should be keeping track of all business expenses as a regular course of business, anyhow. Fortunately, some of them will help you pay less taxes overall.
Check with your tax preparation advisor to know which of these deductions will be applicable in your personal situation, as well as how to maximize their use.
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