5 Tips for Minimizing Your Taxes (Legally!)
By Samantha Chang
There’s nothing more demoralizing than watching your income get slashed by taxes. In fact, according to a recent Wall Street Journal Study, two out of five Americans do nothing to minimize their tax liability. That’s like throwing money out the window, and who can afford to do that? Here are some allowable tax deductions and common tax deductions to reduce your taxes and potentially save yourself a sizeable chunk of change.
Keep receipts on work-related supplies.
- If you use your home computer or phone for work, you can deduct these costs on your taxes. For those who use a home-office to run their business, deductible expenses include the business portion of real estate taxes, deductible mortgage interest, rent, casualty losses, utilities, insurance, depreciation, maintenance and repairs. More details on the tax benefits of home-office use are available at the IRS website.
Donate old clothes and other unused items to charity.
- In addition to doing a good deed and clearing out your closet, you can deduct the fair market value of non-cash donations to a qualified charitable group. This won’t make a huge dent in your taxes, but every little bit adds up. Don’t forget to keep the receipts.
Let Uncle Sam subsidize your job search.
- You can deduct job-seeking costs as miscellaneous itemized deductions. These expenses include phone calls, travel expenses, resume-photocopying and any other costs you incur in your job hunt.
Bunch your deductions.
- Often times, you have to reach a minimum amount before you can deduct certain expenses such as medical or dental costs. So if you anticipate high medical bills this year, considering taking other costs now, such as dentistry work, so you can get the deduction this tax year.
Medical expenses and related equipment you require are tax-deductible.
- If you have a medical condition that requires you to purchase a whirlpool or receive regular therapeutic massages, you can deduct these items. If you drive your car for work- or medical-related trips to the doctor, keep a record and deduct 10 cents a mile for tax purposes.
In addition, itemized deduction tables can help you calculate all your available tax deductions. None of these steps will make you Bill Gates, but taken together, every little bit can add up to significant savings for you.
The articles on SingleMindedWomen.com do not constitute professional tax advice or regulated financial advice, which recommends a course of action based on the specifics of your personal circumstance. These articles are intended to provide general personal finance information. Please consult a financial professional or tax advisor before making any important decisions.