Tax season is right around the corner. While you might not be able to affect last year?s taxes, this is a great reminder to improve this year?s tax situation. If you were dissatisfied with the outcome of your taxes last year, you will want to focus on additional ways to reduce your liability for the coming year.
Track your business expenses in a more organized method
When you own a business or spend funds for work, you can usually write these costs off. However, it is important that you organize and track them. You should never write off something that you do not have recorded somewhere. Common write offs include a work vehicle, mileage, a home office, and computer equipment. Depending on the type of your business, there are likely to be specific write offs that you can use that specifically are designed for your business.
Download a mileage tracking app
If you have ever attempted to write off mileage for business purposes, you have probably noticed that it request exactly how many miles were driven for both business and personal use. This can be difficult to estimate. Fortunately, there are apps that you can download to your phone that allow you to categorize drives and track them throughout the year. At the end of the year, you can easily pull up a totaled amount of miles. Easily input this calculation into the database and enjoy your deductions.
Increase your charitable donations
You can also write off any charitable deductions that you make throughout the year. It makes more sense to donate unused items to the local charity and to accept the tax write offs than to pay that money to the tax department. If you are going to donate charitable clothing donations for the purpose of tax write offs, makes sure you are donating to a reputable charity, like Purple Heart clothing donations. Purple Heart clothing donations go to those that really need them and the Purple Heart is a recognized non profit organization.
The IRS does not require that you receive a receipt for small clothing drop offs or donations. However, if your clothes donation is worth more than $250 (including donations of clothing and household items), you will require a receipt to write it off on your taxes. Fortunately, this process is pretty simple. You simply go to your local Purple Heart clothing donations center and request a receipt for your donations. You can also schedule a donation pickup service and still receive a receipt.
Donate business items
Donating business items are a great way to reduce tax liability because you can also write off a portion of the cost of the business suit. If you donate business items to a reputable charity like the Purple Heart clothing donations center, items like men?s overcoats and suits are worth approximately $60 as a tax write off. Almost 100% of household textiles and clothing can be recycled, regardless of quality or condition. Even highly worn items can be recycled down into bedding or furniture insulation.
Tax season can be stressful for many. You have to track down all of your receipts and income information for the last year. Then, you have to compile all of the information onto a single form. A mistake can result in you paying too much, not getting as much of a refund, or being audited. Fortunately, there are ways that you can reduce your tax liability while also helping out local charitable organizations.