We need to file taxes every year and this is impacted by new IRS tax laws. There have been 9 acts in the last two years and more than 1,500 tax changes that are sure to confuse one and all. The filing of taxes is both expensive and time consuming and you should follow the following tips to get the best deal:
Deduct the following expense from your total income:
1. Job Searching Expenses
Expenses incurred in the process of searching for employment can be deducted from the total income for that year. The expenses that can be deducted include referral fees, job counseling, employment agency fees, telephone charges and any other charges that are due to the fact that the person concerned was looking for a job.
2. Moving Expenses
The expenses incurred for moving the house from one place to another that is nearer to your new job are deductible provided you have moved more than 50 miles. The cost of moving yourself, your family and household good can be deducted thereby allowing you to calculate the tax payable correctly.
The cost of medical insurance premiums during the time you were not employed are deductable from the income for that year.
Unemployment Compensation –
Compensation received by unemployed people for up to $2,400 per year is exempt from tax.
4. Home Office Expenses
These expenses are deductible in case a part of the home is used as an office. Depreciation, maintenance, utilities, insurance and repairs can all be deducted from the total income.
5. IRA Contributions
IRA contributions of up to $5,000 for people up to 50 years and $6,000 for people over 50 years is deductible from the income for a particular year.
6. First time home buyers
People who buy a home for the first time are eligible for a tax credit of up to $8,000 per year, which is deducted from the total income of a person for the year.
There are various other things that need to be considered while filing your tax returns as per IRS tax laws like American Opportunity Education Credit, Tuition fees and education costs, making work pay credit, Adoption tax benefits, child tax credits, standard mileage rates, energy credits, Foreign financial accounts, long term capital gains and tax refund options. The bottom line is that you should keep a track of all your expenses in a particular year so as to get the maximum tax benefit possible. Do you keep a record of all your expenses related to the above headings?