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There’s no doubt that taxes can be overwhelming, but did you know there are quite a few tax deductions that you might not be aware of? From expenses related to education and adoption to costs associated with job hunting and moving, many deductions can help offset your tax bill. And while some of them may not be applicable to everyone, taking advantage of these deductions can make a significant difference in your tax liability. So if you’re feeling bogged down by taxes, Financial expert, Dr. Lynn Richardson looks at some of these lesser-known deductions and see if they’re right for you.
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Five Common Tax Deductions You Might Not Know About
1. Your Children
Here’s the deal: If you hire your kids to work in your business, you can pay each child up to 413,000 a year. Each one. That money is a complete tax write-off to you and its tax-free to your child as long as the child is working in a parent’s home-based business. It’s 100% legal. The IRS 100% allows you to use their tax codes to avoid paying more taxes.
Now you don’t want to invade paying taxes because that will land you in jail. But learning how to legally avoid paying taxes is perfectly fun.
2. Vacations/Business Trips
I don’t take vacations; I take business trips. For example, when you go on a vacation, you don’t get your money back. But if you take a business trip, you do. So the last business trip we took from my daughter’s college graduation to Jamaica, we filmed a family video for my website that I use in my business to promote something. Clients learn how to leverage their family in their business.
3. The Cares Act
The Cares Act made it possible even for your feminine hygiene. Your Midol. Your Advil. Your over-the-counter Feminine hygiene products are now deductible as a business expense. Let me tell you why. When you have a home-based business, you get to set up what’s called a medical reimbursement account. Most people who are self-employed don’t realize they can have one because they only think they can get them at a corporate job. But you can set one up yourself when you set up this medical reimbursement account, you can now write off all the medical expenses that you normally couldn’t not write off.
4. Business Meals
I said it. I don’t care where you go. Papadeaux’s, Red Lobster. Whatever it is, we are going to discuss business.
5. Home Office
All of the items are in your home office.
