Ways to Save Money on Your Taxes

In these tough times, simple things like tax deductions are far from Our minds. Taking the easy way out by not using these simple deductions could cost hundreds even thousands of dollars when tax season, rolls around this April 15th. It is estimated about 40 million People claim nearly 1 trillion dollars using itemized deductions on there 1040s and another 85 million People claimed a half a trillion by using standard deductions on there taxes last year. Don’t take the easy way out an shortchange Yourself out of Your hard earned Money.

Simple Deduction – State Sales Tax

You have two chooses, depending on what state You live in. You can either deduct state an local sales tax or state an local income tax. For most People income tax is the better of the two deals. The IRS provides detailed charts an tables that will show just how much You can deduct by state. It is possible to Claim both sales an income tax if You Purchased a Home, building materials, car, boat or even an airplane. You get to add the sales tax, in the amount shown in the IRS charts & tables. As long as the rate in sales tax doesn’t go over or exceed, Your states sales tax rate.

Simple Deduction – Charitable Contributions

You should always claim those big checks You write to Your favorite charitable organisation an payroll deductions You may have given. But what You might have missed, is all the small contributions an gifts, You have made over the past year. Such as the soup, You made for You local Shelter. You can deduct the cost of ingredients or the money spent for Your Childs school fundraisers. Remember all the little things add up for a sizible deduction on Your Taxes.

Simple Deduction - Interest Paid on Student Loans

New Laws have been put in place that allow Student loans that were acquired by Children but paid for by there Guardians to be taken as a Deduction on there taxes. The IRS now allows this an, treats it, as if the Parents gave the Children the Money to pay off the Loans. Aslong as You the Child are not claimed as a Dependent, You can Claim up to $2500 off the interest paid on the Student loan. That was paid for by Your legal Guardians.

Simple Deductions - Moving Expenses

I bet You didn’t know that You can deduct, Your moving expenses, the only hitch is it has to be more then 50 miles from You current residency and You can get it with out listing it in Your itemized Deductions. This deduction includes Traveling expenses, for Your Stuff and the the cost of You driving back an Forth. Up to 19 cents per mile plus any parking fees and tolls You might incur during the move.

Simple Deduction – Redeemed Your Dividends

Now this really is not a Deduction, but it is a good subtraction to save a lot of Your money. Most tax payers don’t even know or miss when filing there taxes. Most People invest in Mutual fund shares, either on there Own or through the company they work for. The Mutual funds usually earn Dividends, which are in most cases automaticlly reinvested into the Mutual fund. Every time You earn a Dividend from Your shares an it’s invested back into the Mutual fund, it increase Your tax burden. But it will reduce You overall Capital Gains tax  and or Savings loss When You cash in Your Mutual Fund Shares. Ultimately it will save You a lot of Money through out Your life.

Simple Deduction – Military Training Expenses

If You are an Active Military Member, You can Deduct, the Cost of Traveling to Your training. You can add this Deduction without itemizing Your tax return. Only If You have to travel more then a hundred miles to the training event. If You meet the requirements, You can deduct the Cost of food, room and board, an up to 58 cent per mile driven in Your Own car. In addition You can Deduct any tolls or parking fees You encounter.

Simple Deduction – Child Care Reimbursement Credit

The Child Care Reimbursement Credit, it better then a regular Deduction, it is a dollar for dollar reduction in Your Tax Bill. Under the law, You can Spend up to $5k, through a tax favored work account. And a new limit up to $6k, if the expenses fall under the qualifications of the credit. But the the old credit of $5k limit is still for reimbursement accounts.

Simple Deduction – Inherited Estate Tax

If the amount of the estate is large enough to fall under federal estate tax. You can get Deductions when ever You withdrawn from it. For example an estate left a two hundred thousand dollar IRA to a benefactor, 95 thousand of which is add to the benefactor’s estate tax bill under federal Law. When ever You withdraw You will get a sizable Deduction. For example you withdraw $100000, You’d be able to Claim approximately $45000 as an Itemized Deduction on Your tax return.

Simple Deduction – Mortgage Refinancing Points

If you have bought a house or have refinanced recently You can get a Deduction of points paid to obtain or refinance Your Mortgage. But when You refinance You minus the Points over the course of the loan. Your not Going to save a lot of money in Taxes, but every little bit adds up, and over the course of years it could amount to thousands of dollars in savings.

Always use a Trusted Tax Service, that has the ability to add Deductions that suit Your needs. Don’t miss the opportunity to save on the amount You Pay in taxes or Get back on Your tax return. Under the Law it is Your Right to claim these Deductions, don’t let them go to waste.