10 Money-Saving Tax DeductionsJanuary 26, 2016
Are you taking advantage of tax deductions available to you? If not, learn how you can start in 2016.
Have you deducted all you can from your taxes this year? There might be tax write offs that you are not availing yourself of. Don’t lose out on benefits available for activities you do on a regular basis!
10 deductible expenses you should know about
- Tax preparation fees- Most people don’t realize that you can usually deduct tax preparation fees in the year you pay them. So on your 2015 return, you are able to deduct fees paid in 2015 for your 2014 return prep. Both corporate and individual (Schedule A) taxpayers can deduct prep fees, but in order to receive the deduction, you must itemize your deductions and the sum of your miscellaneous expenses must surpass 2% of your Adjusted Gross Income (AGI).
- Education- Often times, companies will offer education stipends for employees to increase their knowledge in the field. Things like books, workshops, online classes, and conferences can all be deductible, too. Our blog- “Education Credits and Deductions: Will Any Benefit You on Your 2014 Tax Return? has more on this.
- Travel- As an alternative to reimbursing employees for expenses they incur while traveling, you can offer them a per diem amount or daily allowance for lodging, meals, and other incidentals. Read more about per diem rates in our blog, “IRS Updates 2016 Per Diem Rates for Business Travel”.
- Entertainment expense- The general rule for deducting entertainment expenses is that actual business must be discussed during the outing or meal. You may be able to deduct up to 50% of the costs of entertaining customers. Read our blog- “Crash Course on Deductible Entertainment Expenses” for more information on what’s deductible in this area.
- Association membership fees- Networking with others in the same industry as you is vitally important to the success of your career. If you are interested in being part of a trade or industry association, membership fees (which most associations have) can be put towards a write-off.
- Rental Property- There are deductions also available for rental property if you meet two tests- one of them being that you rent the property at fair value for 14 or more days during the tax year- Read our blog, “What Expenses Can you Deduct if you Rent Out Your Vacation Home?” to find out what other qualification you must meet for the deduction.
- Bonuses- Bonuses are a great write off for business owners and a great benefit for employees. Read our blog- "How To Deduct Bonuses in 2015 But Pay Them in 2016” to learn how you can lower your bottom line by giving out bonus checks.
- Charitable Deductions- What better way to get a tax deduction than donating to charity? Read "Charitable Contributions: Timing is Everything" for assistance on timing your donations appropriately in order to qualify for a deduction.
- Costs of Commuting – Unfortunately the costs of driving to work in traffic every day are not deductible. However, many employers offer Qualified Transportation Fringe Benefits. Similar to flex spending accounts, you can opt to make pre-tax deductions from your pay to cover commuter costs such as parking, bus passes, and train tickets. Check with your employer to see if this type of plan is offered and read our related blog on commuting expenses for more information.
- Home office deduction- Do you work from home? The standards for deductibility are fairly strict in this area, including the requirement that the office area of your home is used exclusively for business, and serves as your primary business location. You will want to read our blog, “Tax Question of the Week: Have Home Office Deduction Rules Changed for 2013?” to see if you qualify for the home office deduction.
If you qualify for any of these write offs, be sure to take advantage of them on your 2015 return.
Questions? Contact any member of our Tax Services Team.