Filing your taxes can be a headache. However, taking the time to submit purchases that are tax-deductible could save you a big chunk of money. Many people don’t file certain tax-deductible purchases because they are unaware of their eligibility. Educating yourself on the deductions you are eligible for is a great way to eliminate the possibility of not being able to pay your taxes.
Outlined below are four tax-deductible purchases you should take advantage of. If you are struggling to file your taxes, you should consider working with a tax resolution lawyer. An attorney can help ensure you maximize your deductions and reduce your tax bill.
1. Sales Tax
One surprising deduction you can claim is sales tax. If you live in a state that doesn’t have state income taxes, this can save you a lot of money. Even if you paid state income taxes, the sales tax deduction could provide more savings, especially if you made significant purchases within the past tax year, such as a car or expensive jewelry.
To take advantage of the sales tax, you’ll have to itemize the deduction rather than taking the standard deduction. However, everyone’s tax situation is unique, and it’s important to consider whether itemizing or taking the standard deduction makes sense based on your entries.
2. Healthcare Premiums
Medical expenses can destroy anyone’s savings and budget, and the IRS is sympathetic—to an extent—to the burden of medical costs. Depending on your situation, you may be able to claim medical expenses in the form of insurance premiums as a deduction. In order for your premiums to qualify, they’ll need to exceed 7.5% of your adjusted gross income. However, freelancers, contractors, and other self-employed workers may be able to deduct 100% of their premium cost.
3. Babysitting and Childcare Costs
You may be able to deduct the cost of a babysitter if you’re using them to watch the kids while you are at work, looking for employment, or a full-time student. In order to claim the deduction, you’ll need to provide your babysitter’s contact information and tax ID number. While babysitting costs aren’t technically classified as a deduction, they provide more of an advantage because you don’t have to itemize your deductions to receive the credit. This allows you to lower your tax bill while also taking the standard deduction.
4. Charitable Donations
Of all the tax deductions, most people are familiar with charitable deductions. The majority of taxpayers take advantage of charitable gifts. However, most don’t make the most of the deduction. In addition to direct donations, any out-of-pocket expenses for charitable organizations also qualify. For example, if you bought supplies or baked goods for a fundraiser, you can deduct the cost of those goods. In order to fully maximize the deduction, you’ll need to save all your receipts.
Consult a Skilled Tax Resolution Attorney
No one likes filing their taxes. However, understanding which expenses are eligible for deductions can help reduce your tax bill. When you maximize your deductions, you can help prevent scenarios in which you can’t pay your taxes.
If you are struggling to pay your taxes, you should contact a skilled tax resolution attorney. A tax lawyer can help you determine the best payment plan for your situation. At Morgan Sebastian Law, Attorney Becky Sebastian is eager to help you navigate the complexities of your tax situation. We understand the challenges of paying taxes while experiencing financial hardship, and we are here to help you handle negotiations with the IRS.
To schedule a consultation with an experienced tax resolution lawyer, call 877-938-1350 or fill out our online contact form.