| What Can I Deduct On My Taxes? |
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| Written by Zach Allred |
| Tuesday, 30 March 2010 12:17 |
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During the last 20 years as a tax accountant I have been asked many questions but the most common is what can I deduct on my taxes? The answer I give to this question greatly depends on what I know about the particular needs of my client. Are they self employed? Are they asking on behalf of their corporation? Contained in this article are several tax deductions that I feel best answers this question for the broadest audience.
During the last 20 years as a tax accountant I have been asked many questions but the most common is what can I deduct on my taxes? The answer I give to this question greatly depends on what I know about the particular needs of my client. Are they self employed? Are they asking on behalf of their corporation? Contained in this article are several tax deductions that I feel best answers this question for the broadest audience. Moving expenses can be deducted if you had to change your residence during the current tax year because of a change in employment. There are tests to meet but you are entitled to deduct transportation, storage of household goods, lodging, and expenses incurred while house hunting. Did you try your hand at self employment last year? Success or failure does not govern the deductibility of many items. Cell phone, computer expense, wages to children and spouse, internet costs, and home office are only the tip of the iceberg for self employed individuals. Consult with your tax adviser to ensure you structure your personal situation to maximize these deductions. This next one is one of my personal favorites and one that most tax professionals are not even aware of. Within the past 1 to 2 years have you loaned money to a family member or friend and not been repaid? Amazingly you can deduct this as a worthless debt on your personal tax return. Mileage is deductible if you are self employed but did you know you can also deduct miles driven to a from doctor and hospital visits? Also miles driven for charities such as your church are deductible. The rates change each year but for 2010 the medical rate is $.16.5 per mile and $.14 per mile for charity. This may seem like peanuts but start adding these miles up and you will be amazed at how much you could have been deducting all these years. Educator expenses found on line 23 of the 1040(2009) is one that applies primarily to teachers. When a client who is a school teacher asks me what can I deduct on my taxes I immediately make them aware of this deduction. Consult with your tax adviser for current year limits and proper documentation. Have you heard of the "Additional child tax credit?" Most people know of the child credit as it gets quite a bit of media attention but the additional child credit in many cases is more than the child credit. Make sure you or your tax preparer is claiming this one. Did you know you can deduct expenses relating to an S-Corporation or Partnership that you materially participate in? You are allowed the same deductions as other self employed individuals and you can take these deductions on Schedule E. Be sure to let your tax preparer know if you have expenses that have not been reimbursed by the S-Corporation or Partnership. When you work for someone else you may be incurring expenses that are deductible if your employer is not reimbursing you. Unreimbursed employee expenses is the category these fall under. Consult your tax advisor to make sure you are taking full advantage of these deductions. You may have your question "What can I deduct on my taxes?" answered in the previous paragraphs but if not or you have other tax related questions you are welcome to contact me through email. Either I or a member of my staff will respond. Simply follow the links at the bottom of this page to my website where you can find my email address. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Zach Allred is a tax accountant with twenty years experience. Jump to Small Business Taxes to subscribe tor his Free Newsletter. Also visit Federal Tax Deductions to read other free articles. |