Advice on tax deductions can help you save thousands of dollars in taxable income. Many people forget that the main objective of the IRS is to claim the money that they are entitled to. The rest of that can be deducted. Texas has lower taxes than most States, and on top of that, you can use tax deductions to make things easier. (1) After all, this is one of the reasons why people want to start a business in Texas.
Now let’s check some of the most overlooked tax deductions.
- EITC – Earned Income Tax Credit
The Earned Income Tax Credit represents a refundable tax credit. The credit itself was created to support wages for low income and moderate income workers. Those who want to use the refund should file a tax return. The process is a little bit complex and it may be a good idea to hire professional accountants to get the job done.
- Changing residence because of a new job or changing a job in general
It turns out that whenever a person has to move from one place to another and this move is over 50 miles away from your current residence can help you deduct specific moving expenses from the taxes. Of course, this relocation must come as a result of the new job you’ve found. This is how the country supports people looking for a job or a better job.
- Having a home on leased land
Another great way to deduct some of your taxes is to live in a home on leased land. This situation allows you to deduct rent payments for that land. Once again, we are talking about a complex procedure that requires the attention of a professional tax advisor like the ones from TaxPM.
- Home refinancing
Experienced homeowners know that refinancing a home comes with a few fees that can affect your budget. However, you can deduct some of these fees from your taxes. There is actually a list of refinancing deductible items that you can use to your advantage.
- Medicare premiums
In case you are a self-employed person, you may be able to deduct the premiums paid for Medicare (parts B and D), Medicare Advantage Plan and Medigap Insurance. You don’t have to itemize deductions to use these deductions.
- Casualty loss
Casualty losses represent a specific kind of tax losses that come as a result of an unexpected, unpredictable and sudden event. We are talking about weather-related or fire damage that has led to property loss. If this loss is not covered by an insurance claim, then you can use is at as a tax-deductible item.
- Car payments
If you have used your car for business purposes you can deduct actual expenses (oil changes, replacement tires etc.) and/or on the standard mileage rate. This is a nice way to save some money on your tax return. (2)
Keep in mind that these are some of the many overlooked tax deductions. Consult an expert in this area for additional information – contact TaxPM.