April 15th is still a long way off, so why bother worrying about taxes now? When it comes to taxes, it pays to be proactive. Sure, you can always lean on the advice of a local tax attorney or accountant, but being mindful of your tax situation in advance can save you money and headaches come April.
The first thing to keep in mind when planning ahead for tax season is to retain important receipts. Even everyday transactions can sometimes be claimed as deductibles. Keep hold of your non-reimbursed work expenses, child care bills, student loan interest payments and any improvements to your home. These may not seem relevant to your taxes, but there are lots of write-offs you can use to reduce your tax burden.
One area of tax deductions often overlooked is home business expenses. If you work for yourself from home a lot of household expenses can be claimed. Some items that you should keep receipts for are high-speed internet bills, technology expenses such as a computer or printer, and even phone usage.
Image: Vichaya Kiatying-Angsulee
Another area often overlooked is medical expenses. If your insurance doesn’t cover something that’s been prescribed by your doctor that may be eligible. Often times this can include expenses such as therapy sessions for various conditions.
Are you charitable? You may not even realize that any donations you make during the year can be claimed on your taxes. This would include toys, kitchen items and even clothing donated to the Salvation Army or other charities. If you make financial contributions to your local church that also counts. During this time of year especially you’re likely to receive quite a few requests in the mail from local organizations in need of donations, make sure to keep those receipts! And who isn’t hit up by coworkers to support various charity walks, fundraising drives, or school trips for their kids? Keep record of each and every donation you make throughout the year and also ask for receipts as well. These little donations each month can really add up when you get that refund check in the mail!
If you have any questions about whether or not something qualifies as a tax write-off you can always consult the IRS Itemized Deductions List. This can be a bear to work through so when in doubt just keep the receipt! The more records you have from your transactions and donations throughout the year the easier it will be to complete your taxes and get your own money back come April!
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