Tax Loops

Tax breaks for everyone,…

Tax loopholes are not just for the rich or large corporations. In most cases, individuals and small companies have the same opportunity to reduce their taxable income and earn credits. Not having a certified professional to assist in the process will likely cause them to leave a lot of money on the table.

Here are a few tax advantages that are often overlooked:

• If you’re self-employed and paying the full Social Security and Medicare tax yourself you’re missing out on a great deduction. Self-employed can write off half of those taxes since they are their own “employer” who would normally pay that difference.
• The “Lifetime Learning Credit” is something many people fail to claim. The credit is worth up to $2,000 a year, based on 20% of up to $10,000 you spend for post-high-school courses that lead to new or improved job skills. The right to claim this tax credit phases out as income rises from $54,000 to $64,000 on an individual return and from $108,000 to $128,000 for couples filing jointly.
• The self-employed who qualify for Medicare can deduct premiums paid for Medicare Part B and Medicare Part D, plus the cost of supplemental Medicare (medigap) policies or the cost of a Medicare Advantage plan. If you are covered under a health plan with your spouse or a second job this won’t work for you.
• Job-hunting expenses are not deductible for your first job. However, moving expenses to get to that job, which is at least fifty miles away from your old home most certainly are deductible. You can deduct the cost moving including 23.5 cents a mile, plus parking and tolls. The cost of moving pets, believe it or not, can also be deducted.
• If you are a member of the National Guard or military reserve you can write off the expenses related to traveling to drills and meetings. You must travel more than 100 miles from home and be away at least one night. You can also deduct the cost of lodging and fifty percent of the cost of meals. There is an additional .56 cent allowance per mile driven including parking and tolls.
• Jury duty is another great tax deduction that most Americans miss out on. The IRS considers jury pay a taxable income. Some employers may pay full salary while you serve on jury duty and those employees may be required to remit jury pay back to the company. If this is your case, you can deduct the amount you give to your employer.

There are truly hundreds of great tax credits and deductions available to every tax payer, many on a state level as well as federal. The old adage that “What you don’t know can’t hurt you” does not apply here at all.

While some deductions may be only a few dollars, the overall total can add up to hundreds and even thousands of dollars you legally deserve to get back. Don’t leave the money on the table.

The professionals at Christofi and Company are experienced trained professionals who can help you get more of your money back in your pocket. Contact us for a free evaluation and always give us a call when you have tax related questions. We’re here to save you money.