Strategies for Reducing Your Tax Bill
“Nothing is sure except death and taxes,” said Benjamin Franklin. We can help you with the taxes part (with death, you’re on your own). What are some small things that can help you keep more of your money in your pocket? Let’s look at a couple.
- Save Receipts. This one is simple. When you spend money on work or medical expenses, save your receipts. It’s easy to forget them as you go through the year. Apps for your phone or tablet can help you wrangle these bits and pieces, and get all of the deductions you can. Do this with charitable donations as well. If you send a text to a charity to make a donation on your phone bill, take a screenshot. All of these will add up over the course of the year!
- Manage Your Workspace. Have a side hustle? Carve out a corner of your house to devote entirely to the activity. If you use a portion of your house exclusively and regularly as your principal place of business (including storing your inventory), you may be able to take a portion of your expenses as a deduction. If an expense is related only to the business portion, it’s deductible in full. If it’s an expense related to the entire home, the deduction is based on the percentage of the home used for business. For example, if you use 200 square feet of a 2,000 square foot home, 10% of some of your expenses may be deductible. Alternatively, you can use the simplified method to deduct $5 for each square foot of the home that is used for business, up to 300 square feet. So the earlier example would give you a $1,000 deduction using the simplified method. Be careful though; personal use of the area means that you can’t take the deduction.
Talk to your tax professional to learn more about these and other ways to make the most of your deductions!
Important Tax Return Due Dates
- For individual taxpayers, Forms 1040, 1040A, and 1040EZ are due on April 17, 2018. The extension deadline is October 15, 2018.
- Form 1065 for partnerships and Form 1120S for S corporations are due on March 15, 2018. The extension deadline is September 17, 2018.
Did You Know?
In the Roman calendar, March was originally the first month. In 45 B.C., New Year’s Day was celebrated on January 1 for the first time in history as the Julian calendar took effect.
“It always seems impossible until it’s done.” ~ Nelson Mandela