No one wants to pay more on taxes than they have to. Still, there are tax deductions that most people miss. These deductions lower your tax burden, potentially giving you a bigger refund at the end of the year. Before you sit down and file your taxes, make sure to familiarize yourself with common and widely available tax deductions.
Most people don't know that you can deduct certain kinds of entertainment. If you own a business and take new clients out on the town, this can qualify as a business expense. Further, you should always save receipts for company parties and festivities that you put on on your own dime -- these are deductible. The definition of business-related entertainment is fairly elastic. Keep all your receipts and make a note on the back about what business-related activities went on.
Most people know about tax deductible donations to charitable organizations. However, what few people consider are the tax deductible possibilities of donating items other than cash. The unwanted items you dropped off at the Salvation Army last year are tax deductible. Make sure that you get a receipt, however. While this will only be viewed by the IRS if you are audited, it is best to be prepared for just such a contingency.
You can buy things for yourself and deduct them from your taxes, within certain boundaries. The items must be for school or work. Further, you cannot receive any kind of reimbursement from your school or employer for the items. You must also use the item for school or work more than half the time. This means that you can't claim your Xbox because you wrote a paper on it -- but you can if you're majoring in video game design and need to test your own games.
The self-employed make out like bandits here -- they can deduct 100 percent of the cost of health insurance. Others can also find a deduction for health-care related expenses paid out of pocket. People with an employer health care plan can deduct expenses once they exceed 7.5 percent of the adjusted gross income. Self-employed people can make their deductions without itemizing, lumping it in with their adjusted gross income for the year.