Wednesday, February 06, 2019 / by Holly Northup
Unfortunately, many of us often wait until the last minute and, therefore, lose many of the tax benefits we could receive if we took the time to do our due diligence early! So…get those documents together and get it done now!!!
Recently, I read a brochure that suggested we look at the following deductions that might save us money on our 2016 income taxes.
1. Sales Tax – You can write off sales tax that you paid throughout the year…especially on large purchases such as a car, boat or major home renovations.
2. State and Local Property Taxes – You may be able to deduct the property taxes you pay on your home, land or other properties that you own.
3. Home Mortgage Interest – You can write off interest on your mortgage for primary or secondary residences up to $1 million.
4. Interest on Home Equity Loans – You may be able to deduct the interest of your home equity loan up to $100,000.
5. Home Buying Expenses – If you’ve purchased a home within the 2016 year, you may be able to write off the loan origination fee, prorated interest, or prorated property taxes.
6. Child Care – If you work and must pay child care while you do, you may be able to qualify for a 20%-35% deduction of $3,000 (one child) or $6,000 (two or more children) on your income taxes.
7. College Expenses – There are often tax deductions that you can take if you are paying for a child in college. Check with your CPA to find out what deductions apply to you.
8. Student Loan Interest – Many times you can deduct the interest you pay for student loans depending on your income.
9. Medical Expenses – If your medical expenses exceed 10% of your adjusted gross income, you may be able to deduct your out-of-pocket expenses for medical care throughout the year.
10. Self-employment – There are many business expenses that you can deduct if you are self-employed. These include home offices, car usage, car purchases, entertainment expenses, marketing expenses and many more.
11. Charity Donations – If you donate money to certain organizations, you may be able to deduct those contributions. Keeping receipts throughout the year for those donations is a good idea to make sure you get the deductions you can take.
12. IRA Contributions – Check to see if you are eligible to deduct your contributions to a traditional IRA or a Roth IRA.
The best way to get the biggest bang for your buck is to meet with an accountant or tax professional because tax rules often change and you never know if there are deductions that you qualify for that you might have overlooked.
Start the tax process now so that April 15th won’t sneak up on you and cost you money!
If you or someone you know is interested in buying or selling real estate in the Austin area, please contact Kathleen Bucher at KathleenBucher@mac.com or 512.794.6644. It would be an honor to earn your business!