When the year is nearly over, do you always have an “a-ha moment” when you remember all of the possible tax deductions you could have claimed from our previous meetings, phone calls, and emails?
In this month’s article, I’ll share the 7 things you can do right now to boost your tax refund. These are the same things that I discuss with my small business clients, year after year. These most-overlooked tax deductions can save you hundreds or perhaps even thousands of dollars during the 2016 calendar year.
1) Charitable Deductions
You probably remember the big check your business cut to your kids’ school, house of worship, or golf tournament for a worthy cause, but what about the $25 here and the $50 there that were out-of-pocket charitable contributions?
If you itemize your deductions, you can subtract these costs, including the current value of household goods and other items that you donated to your favorite charity. You may also be able to deduct items such as postage for sending letters for fundraising and your car mileage to attend charitable causes at 14 cents per mile.
2) Summer Camps and School Costs
>Summer camps can be costly for day care, sports, sleepovers, art, music, swimming, and the like. Fortunately, under the Child and Dependent Care Credit, expenses for sending children aged 13 and under to a day camp while you and your spouse work can be tax deductible for up to 35% of your income.
3) Classes that Further Your Expertise
Whether you took a series of courses to further your education or carry a full course load, you can earn benefits through the American Opportunity Tax Credit for your college expenses. With the latter, you, your spouse/partner or dependents can deduct up to a whopping $4,000 for your tuition, fees, books, and educations supplies.
4) Moving Expenses
If you moved at least 50 miles to your new job, even if it’s commuting to the same job, you can qualify to deduct your job-related moving expenses. This can include the cost of hiring a moving company, the purchase of boxes, storage costs, and other fees related to the move.
5) Your Health Insurance Premiums
Even if your small business pays health insurance costs, as well as your spouse’s and dependents’, you can deduct these from your taxes as well. With most people paying hundreds of dollars per month, these costs can really add up for deductions.
6) Mortgage Points for Your Home Purchase or Refinancing
Did you purchase a home during 2016? If so, any points you paid on the mortgage may be tax deductible. But if you refinanced, the points have to be divided over the life of the loan. However, if the acquisition debt is more than $1 million or if your home equity debt exceeds $100,000, you unfortunately cannot deduct all of your points.
7) Your Accounting and Bookkeeping Services
This is the most obvious deduction, but some of my clients still fail to remember to claim it. My fees for accounting and bookkeeping services are 100% tax deductible for your business, while a portion of them may be deductible for your personal finances.
Bonus Tip) Job Search Fees
If you changed jobs during 2016, are looking for a job now, or were looking but didn’t land that new job, you can still deduct the cost of preparing and mailing your résumé, any fees you may pay to placement agencies, to someone for writing up your bio, or travel costs related to your job search.
I highly recommend that you follow these 7 things to boost your tax refund. If you think we can help find you more ways to save, let’s talk. Give us a call today.
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