Deductions

What to Write-Off From Your Tax Bill This Year

When you put together your state or federal income tax return, you may wonder what you can do to reduce your payment to the government. For those who are self employed, they may be able to deduct any and all of their business expenses. However, those who have a traditional employer may also have methods available to help them lower the amount that they pay in taxes.

Did You Contribute to a 401k or IRA?
If you have contributed to a retirement account, it may be possible to lower your tax bracket for the year. While you will still have to pay full FICA taxes on your income, you may be able to save hundreds of dollars simply for thinking about your retirement. Those who are over 50 may be able to contribute an extra $1,000 a year to their respective accounts.

Did You Move For Work?
Anyone who had to move for work and pay for some or all of the moving expenses may be able to write those costs off on their tax return. As long as the move was necessary and at least 50 miles from your current home, the cost of a moving van, temporary storage and even gas or airfare may be deductible. Make sure to keep your receipts in case the government asks questions related to such write-offs.

Do You Need to File a Return at All?
If you make under the government threshold, you may not need to file a tax return at all this year. However, if you choose not to file, you will not be able to claim any refund that you may be owed. It is important to keep in mind that social security and unemployment benefits may count as taxable income. Those who are not obligated to file in a given tax year have three years to file a return if they think that they are owed money.

While no one likes paying taxes, you shouldn’t pay more than what you owe. It may be worthwhile to talk to a tax accountant or another financial adviser to determine your obligation for this upcoming tax year. For those who aren’t ready to file by the April deadline, you have the ability to ask for an automatic six-month extension to file your return.

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