Tax Deductions That Are Overlooked
Most business people pull together receipts for their tax write-offs during the tax season. Apart from business people who use an accounting software program, those who are good at record keeping can also file the tax returns without much hassle. The knowledge of the expenses that make good tax deductions is not available to every business owner. You are likely to face a higher tax bill or a smaller tax refund if you dont understand the deductible expenses. By reading this article, you will learn some of the little-known tax deductions you may be overlooking.
The first deductions are for wages paid to your children. Sole proprietors are the ones who are allowed to fill this deduction. This deduction only applies if you are a sole proprietor and not as a corporation. Spouses who are in a partnership are allowed to fill this tax deduction. The other deduction that is overlooked is the children expenses. In case you pay someone to look after your children so that you can work, this tax is still deductible. You dont have to be worried if the person looking after your children charges for transportation of your children because you can claim transportation expenses.
If you are running a business from home, Your Home Office tax deduction will be calculated using the space used to house your office. Factors such as your mortgage or rent, insurance and electricity can be used to calculate your home office insurance. The other tax the is overlooked is the smartphone and tablet expenses. If these devices are used for business purposes, you are eligible for this tax deduction.
You should also note that another essential deduction that is overlooked is the monthly internet bills. Most businesses depend on elements such as the internet to operate. You should draw a clear line between the business expenses and personal expenses if you are working from home. Meal and travel expenses is another tax deduction you should not overlook. Costs such as airfare, hotel room costs, and telephone expenses should be part of the factors to consider when filing a tax return.
The other tax deduction you should be mindful about especially if you are continuing education is the tax credit. There is a sigh of relief if you are enrolled in college or university because you are eligible to claim tuition expenses. Similarly, teachers who buy classroom items out of their pocket are also eligible for this tax deduction. Lastly, there is 20% pass-through deduction which allows taxpayers who earn their income through business or trade. Talk to a qualified accountant to help you understand the details of this review.