I think we can all agree that January is pretty much the worst month of the year. Well, at least where our bank accounts are concerned. No matter how hard I try to be thrifty while buying Christmas presents I still seem to spend way too much!
But tax time is right around the corner. Most people know about tax credits like earned income and the child tax credit, but not many people know much about the deductions that can lower your taxable income. Which is just a fancy way of saying it will put you into a lower tax bracket and you will get a higher tax refund. You could possibly receive an extra couple thousand dollars or more depending on how many deductions you qualify for. Here are 5 deductions that will greatly increase your tax refund.
And stick around to the end of this article to find out how you can save hundreds on getting your taxes filed.
1. Charity and church contributions
If you gave money to a church or charity this past year, you can deduct that from your gross income. Some examples of charities include Goodwill or the Salvation Army, the library, Feeding America, and Habitat For Humanity. Pretty much anything that includes donating to a worthy cause.
2. Business write-offs
Any expenses that went towards your job or business can be written off your taxable income. Here is a good list of some business deductions.
- Car repairs (including oil changes) or mileage. Can’t claim both.
- Office supplies including computers
- Phone/ internet/ office space in your home
- Motels or food costs for training or seminars if your employer didn’t reimburse you already.
3. Vehicle licensing
Licensing a new vehicle can really break the bank. A $15,000 vehicle can easily cost you $1,300 to register. Luckily, you can deduct all vehicles that you have licensed in the past year. This includes sales tax and tags.
4. Medical expenses
You can deduct pretty much all of your medical expenses. But you can’t claim your premiums if they are pre-taxed. You will need to talk to your employer to figure that out. Here are some of the medical expenses that you can write off.
- Copays and deductibles
- Payments made towards your medical (including equipment), dental, and vision care (contacts and glasses)
- Orthodontics (i.e. braces)
5. Education expenses
Education expenses can include supplies (including computers) and books that you purchased out of pocket. You should receive a 1098t form if you attended college at any point last year that you can use while you’re preparing your taxes. This alone can get you an extra couple of hundred dollars back.
*Make sure you have receipts for everything or a contribution letter in case you get audited in the future. The IRS can go back six years and recommends that you keep most of your records for at least that long.
Easily file your own taxes to get back more money
Having your taxes prepared by H&R Block or Jackson Hewitt is just waste of time and money. Instead of sitting in their office for at least an hour and answering tons of questions, you could do the same thing yourself from your own home at Turbotax. They take you step by step so you don’t mess anything up. It’s so simple. I’ve been using them for the past few years now and am very happy with their service.
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Can you use any of these deductions to increase your tax refund? Let me know in the comments below!
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