At a recent financial workshop for individuals and business owners, several people shared questions focused on a concern for keeping more of the money they make from employment.
Why? After reviewing their budgets, many find that aside from mortgage, income taxes is one of the largest expenses they have.
With the growing concern for money management, people want to know how to take control of their finances.
Since taxes play a big part of the financial plan, see if you may be able to lower your taxable income by using the following tips.
Medical expenses The medical expense deduction is gaining popularity among individuals as their income starts to decline and medical costs increase.
This is a major cost that a large number of people have previously not been able to take.
In order to qualify, the total medical costs that you pay during the year must be at least 7.
5% of your Adjusted Gross Income (AGI).
To claim this deduction be sure to track the cost of doctor visits, co-pays, prescriptions, medical equipment, and other related medical costs.
You can also deduct mileage and the cost of transportation to and from medical appointments.
Charitable Deductions When it comes to charitable deductions, most taxpayers are aware of the write-off for out-of-pocket contributions.
However, many miss out on non-cash charitable deductions and mileage driven for charitable purposes.
In order to claim non-cash items you will need a receipt from the organization for your donation.
Also when using your vehicle on behalf of a charitable organization, such as to participate in community outreach programs or making food baskets and clothing deliveries keep a written log of your mileage for the tax write-off.
Finally, to be eligible for the deduction the charity must be recognized by the Internal Revenue Service (IRS) as a 501(c)(3) organization.
Gambling Losses If you are fortunate to receive money from lottery winnings or any other form of gambling activities you will get a statement showing the amount to claim as taxable income.
Fortunately, you can also deduct gambling losses from the winnings you incur in the same year.
So if gambling winnings total $5,000 and the gambling losses are $1,000 then you will only be taxed on the remaining $4,000.
There is a ceiling on the amount of losses that you can claim on your return.
The rule is only losses up to your winnings are eligible.
Tax savings do not start when you sit down to complete your return.
It starts with putting a plan in place throughout the year.
Those with strong plans enjoy the greatest savings, and usually bigger returns.
If you want to learn more tax reduction strategies for individuals and business owners, visit http://www.
tbsusa.
com