Spring is just on the horizon. Soon the snow will melt from the landscape, and flowers will appear on the left and right. Tax season is coming too, so it’s time to get your papers out and get ready for the chore.
Here is some good news, however. You don’t have to be prepared for Uncle Sam to steal your hard-earned money. Tax deductions can do you a lot of good if you are entitled to them, that is.
If you want to minimize the amount you owe the government, you’ve come to the right place. We’ve collected eight tax deductions to help save you money when producing. This is good to keep in mind when considering all the changes in tax law in 2021.
1. Did you never receive your stimulus payment? Try that
When the third stimulus payment was initiated, some people never received the full amount. Good news: you may be eligible for the Recovery rebate credit. When filing your 2021 tax return, be sure to keep this in mind.
2. Mother Earth thanks you, as does the government.
If you’ve configured your home to be energy efficient, you may be able to get tax relief this season. It covers everything from roofs, doors and windows to heating and air conditioning systems. If you are using energy in the most efficient way, ask for a residential energy credit This year.
3. Try this if you have children or dependents
Taking care of others pays off. You can claim up to $ 8,000 for one dependent and $ 16,000 if you are caring for two or more people. You will just need to have a good overview of your finances.
Take note of how much you spend on child care, after-school care, and even how much you spend on gas to drive your kids to and from child care programs. Don’t forget to also note the costs of babysitters and nannies.
You will need these numbers to complete Form 2441, which you can attach to your Form 1040 tax return. Just make sure you write down the care providers’ Tax identification numbers, as well as their name and address. (If you don’t know this information, use Form W-10 to get it.)
4. Get a deduction by contributing to your HSA
The money that goes to your health savings account will not be included in your federal income tax. If you contributed to your HSA in 2021, you could get a tax deduction on your expenses. Of course, there are limits that vary depending on your diet, age, and other factors.
Official sources have not shared concrete thresholds for this tax season, but that will change later this year. Waiting for, here is a draft that you can use to get an idea of ââwhat this might look like.
5. Good news for anyone with a student loan
Have you paid interest on loans? Whether your loans are private or government, you may be eligible for a deduction. It works even if you’ve paid off a loan from a spouse or dependent. Here’s how to find out if you’re eligible.
6. Deduct medical, dental and mental health expenses
Doctors can cost an arm and a leg, whether you see a dentist or a mental health professional. You can also cover glasses, hearing aids, insulin, and even acupuncture payments. If you received drug addiction treatment or paid for hospital care, you may be able to claim these expenses.
There’s a catch though: you can only get a break if the total amount you spend is more than 7.5% of your AGI or adjusted gross income. Here are some ways to know your AGI.
7. Use the lifelong learning credit
If you pay the cost of higher education, claim this credit. This does not only apply to courses taken towards a diploma. You can also use it to help pay for job skills classes. You can get up to $ 2,000 for each tax return you file.
8. Generosity pays off
Last year, have you loosened your purse strings in pursuit of goodwill? You can then take advantage of a long-standing tax deduction. If you donated money or property to a qualified organization, you can deduct it from your tax return.
These eight strategies may come in handy when it’s time to sit down and pull out the calculator. Another way to help is by signing up for software that can reduce costly human errors. We recommend Kim’s sponsor, Oracle NetSuite. It’s useful to everyone, but small businesses will find it a lifeline.
Give yourself a gift to start the new year off right
If you are a business owner, you don’t need me to tell you that running a business is difficult. Don’t let QuickBooks & Spreadsheets slow you down and stop paying for multiple systems that don’t give you the information you need when you need it. It’s time to make the switch to NetSuite by Oracle, the world’s # 1 cloud enterprise system.
NetSuite gives you visibility and control over your finances, human resources, inventory, e-commerce and more, all in one place, instantly. Whether you make a million or hundreds of millions in income, save time and money with NetSuite. Join the over 24,000 businesses using NetSuite now!