Summer is here! A great time for vacations with family and friends, seasonal jobs, and even some free time to organize and begin preparing your tax information in advance.
Although tax filing and tax returns may not be on many taxpayers mind during this season, it’s encouraged to seize the opportunity to take advantage of some great tax credits and deductions that are usually able to be accumulated around this time of year.
Here are several ways that you can save money come tax season:
The child and dependent care credit allows you to receive credit for expenses used to pay for the care of a qualifying individual to enable you (and your spouse, if filing a joint return) to work or actively seek employment. You may not take this credit if your filing status is married filing separately. The credit amount is a percentage of the amount of work-related expenses paid. This percentage depends on your adjusted gross income (AGI).
An education credit which helps with the cost of higher education by reducing the amount of tax owed on your tax return. If the credit reduces your tax to less than zero, you may get a refund.
TAX PERSONAL DEDUCTIONS
- 53.5 cents per mile for business miles driven
- 17 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
Generally, 50 percent of meal and entertainment expenses are allowed as a deduction, and you must have records to prove the business purpose.
If you use part of your home for business, you may be able to deduct expenses for the business use of your home. The home office deduction is available for homeowners and renters, and applies to all types of homes.
Some deductible expenses while traveling away from home include the costs of travel between your home and your business destination, using your car while at your business destination, fares for taxis or other types of transportation, meals, lodging, tips, dry cleaning and business calls while on your business trip.
You may be able to deduct qualified education expenses for higher education paid during the year for yourself, your spouse or your dependent. The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000.
The following rules apply to casual gamblers who aren’t in the trade or business of gambling. Gambling winnings are fully taxable and you must report the income on your tax return. Gambling income includes but isn’t limited to winnings from lotteries, raffles, horse races, and casinos.
To deduct your losses, you must keep an accurate diary or similar record of your gambling winnings and losses and be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses.
An eligible educator can deduct above the line up to $250 of any unreimbursed business expenses for classroom materials, such as books, supplies, computers including related software and services or other equipment that the eligible educator uses in the classroom.
In order to claim a job search deduction you must meet each of the following criteria:
- You must have enough tax deductions to itemize them
- The job must be in the same career field as your last employment
- There is not a significant amount of time passed between your last job and searching for a new one.
Some job search expenses that can be claimed are as follows:
- Resumes – You can deduct the cost of professionally creating, printing and mailing your résumé.
- Career Development – Costs from career development seminars, workshops, etc., can be deducted. Any charging fees from employment agencies are deductible as well.
- Travel – You can claim out-of-pocket travel expenses as long as the trip’s primary purpose is to find a job in the same career field
Those seeking employment for the first time do not meet the principal qualifications for a tax claim. The same rule goes for those trying to make career changes. For example, if you are currently employed in the construction industry, gaining new employment in the field of computer technology will make you exempt from receiving this deduction. Finally, any expenses that are reimbursed by a potential employer are nondeductible. This includes any travel or other costs towards interviews and employment.
What Should You Do Next?
In order to properly apply these credits and/or deductions when filing you must have impeccable records of all your expenses. Be sure to keep record of all receipts and invoices, make note of all related expenses (mileage log, etc.), and be prepared to provide written or verbal explanations of any costs, especially work related ones.
In case you misplace some documentation or need more time to gather other info, there’s no need to worry. You can simply e-file IRS Form 4868
and get an extra six months to file your personal tax return within minutes. If you have any questions or need assistance with the e-filing process, feel free to call our live, US-based support team in Rock Hill, South Carolina. We are available at (803) 514-5155, Monday through Friday from 9 a.m. to 6 p.m. EST. You can also send us an email 24/7 through support@ExpressExtension.com