What Can I Do To Get More Money On My Tax Return

What Can I Do To Get More Money On My Tax Return

In 2015 over 45 million Americans itemized their tax deductions on their 1040 tax forms to collect up to 1.2 trillion dollars worth of deductions. The ability to collect heavily on deductibles depends on how well you fill out your tax forms which in turn depends on how well you understand tax laws and so below are a few tips to get you started.

If you are a teacher who loves students so much that you buy teaching equipment using personal finances then the IRS is willing to appreciate your devotion by reducing the expense from the taxes you should pay to the federal government. This policy allows K-12 teachers to deduct up to $250 of total money spent on teaching equipment.

If you have student loan debt as well accruing interest on that debt then there is a bit of solace in knowing that payments of interest are considered deductible from federal taxes up to a maximum of $2,500. In addition to this the IRS changed its policy regarding interest paid by parents for their children whereas it was previously not considered a deductible it is now taken to be that a parent gave a child the money and the child chose to use it for paying the interest and therefore it should be deducted from federal taxes paid.

In an effort to encourage positive charitable activities the IRS offers significant tax deductions to individuals who give money to charity. The limit of tax deductibles on gross income is either 30% or 50% depending on the type of charity but it must be an officially recognized organization. Surprisingly you can even earn tax deductions on hiring a babysitter as long as you are engaged in a charitable activity in the meantime such as volunteering at a soup kitchen.

Anyone who spends time and money to further education qualifications and job skills is entitled to receiving up to 20% tax deduction on all money spent on higher education. “This deduction is capped at a maximum of $2,000 but it does not discriminate based on age and everyone is entitled to it.” said jonathan minikes at the Hillhurst Tax Group.

Losing a job and then having to search for one can be a nightmare and so the IRS tries to lighten the load by allowing complete tax deduction on all expenses spent on finding a job e.g. gas mileage to go for an interview or cost of postage stamps to send resumes. These tax deductions are allowed on all expenses exceeding 2% of previous gross income.

”A major drawback to being self employed is that you are required to remit 15.3% of net income for social security and medicare which is basically double what employees have to pay. Luckily however you are allowed to deduct half of the amount from income taxes” says, richard cannata, from martindale attorney.

The IRS offers guidelines on how to collect on deductibles based on state sales taxes. This tax break can come in handy when you make expensive purchases with a high sales tax e.g. an engagement ring. This can allow you to earn high deductibles on federal income.