Don’t overlook these shocking tax deductions for the next tax season. No one wants to watch money go down the drain unnecessarily. Here are 5 of the most surprising tax deductions to keep in mind for next year.
- Out-of-pocket Charitable Donations
Everyone writes off the large sums of money & donations for charitable events, but don’t forget about all the smaller expenses. If you make food for a nonprofit event, all the money used for ingredients is all tax deductible. Keep all of the receipts for when you file, and if you spend over $250, you will have to mention the organization you donated to.
2. State Tax Paid Last Spring
If you owed taxes last tax season, make sure you remember to claim the upcoming year’s taxes. Keep in mind though that the deduction for state and local taxes is limited to $10,000 a year ($5,000 if married filing separately).
3. Childcare and Dependent Credit
Credit is better than a deduction. It will still reduce your tax bill in the end. There are childcare and dependent tax credits that you may qualify for.
4. Reinvested Dividends
Even though this isn’t a tax deduction, it can save you so much in taxes every year. Many professionals suggest to have your dividends automatically reinvest in stocks or mutual funds to by more shares. Having more shares will reduce the taxable capital gain in the end.
5. Social Security Taxs
If you are self employed, you can right this off because you are paying the full 15.63% instead of the lesser amount employees pay. Don’t forget to right this off! You don’t have to itemize to take this deduction.
The Kael Company can always help you prepare your books and receipts and help guide you into the best way to prepare for each tax season. Get in touch with us if you have questions about your bookkeeping!
