Your business can keep you extremely occupied. From managing your team, and company budget to executing company plans and budget, you have a lot on your plate. So it is quite natural for you to miss out on tax credits because there are frequent tax updates every year. This reduces your chance of tax returns. Well, you’re in luck! Ahad&Co always keeps its customers and followers updated on the tax break changes
To help you from overpaying taxes, this article lists some of the most overlooked tax breaks so you can get more tax deductions.
1. Charitable Contributions
Charitable donations are not planned actions. Whenever you come across an excellent social cause, you instantly contribute to it from your check and payroll. These charitable donations are often deductible from your taxes. So make sure you deduct any expenses related to charity. For instance- if you drive your car towards a charity or fundraising event, deduct the cost spent on the traveling distance
2. Tax Breaks for Freelancers or Self-Employed
If you are self-employed, there are a lot of scopes for you to claim tax deductions. Make sure you list all the expenses related to your self-employment venture on Schedule C. The fees include office equipment and supplies, furniture, the cost of advertising, mailing, business travel, business phone, computer, and software. Some other deductible tax expenses include errors and omission insurance, professional licenses, continuing education, professional publications, and books.
3. Home Office Deductions for Freelancers
Working from home offers specific tax benefits for you. However, if you work remotely for an employer, you are not eligible for a home deduction. To qualify for this tax credit, you must regularly use a part of your home for home office purposes. If you are eligible for this tax credit, you can deduct a portion of your rent, mortgage interest, property taxes, and homeowners insurance.
4. Contributions to Health Savings Account
If you have a health savings account, you qualify for tax returns. For 2022, the HSA contribution limits are $3650 for individuals and $7300 for family coverage.
Moreover, the HSA contribution holds a more significant benefit if you purchase your insurance. Your tax-deductible contributions can lower your taxable income.
5. Reinvested dividends
Reinvesting dividends increases the chance of tax deductions. If you have invested your mutual fund and stock dividends in multiple shares, each reinvestment increases your “tax basis” in the stock or mutual fund. This reduces the amount of taxable capital gain when you sell your shares.
6. Vehicle Sales Tax Deduction
When you buy a car, you are required to pay sales tax on it every year. When your state calculates vehicle registration based on the value of your car, that percentage is deductible from your personal property taxes.
7. Tax Deductions on Medical Expenses
Your medical expenses are deductible from your taxes. If your AGI is $50,000 and your medical expenses cover $3,750. Moreover, any transportation and travel cost related to medical care accounts for a tax deduction as long as the fee exceeds 7.5% of your AGI. However, the amount cannot be deductible if your insurance company covers your medical expenses.
Keep these tax deductions in mind for the upcoming tax year, so you don’t miss any opportunity for a tax refund. Contact Ahad&Co, the best CPA in NYC, to simplify your tax filing.
