Taxes may be one of the most confusing concepts to understand. What can be deducted? What can’t? Sometimes there does not seem to be any sort of pattern at all. So how can you be sure of what is tax deductible and what isn’t? Follow a few of these guidelines and you can start saving on your taxes.
When it comes to tax deductions, almost everything you do that is even tangentially related to work can get you a deduction. This can be something direct like paying for classes to improve your skills, to things such as buying clothing or shoes needed for your job.
Depending on what your job asks from you, you can even find tax deductions when you purchase access to the airport lounges. Another common and important tax-deductible element of work is travel expenses you incur. This is especially true if you use your own vehicle to transport or deliver things, or even if you just drive between work sites in your own vehicle. If you find yourself driving your personal vehicle anywhere for work that is not your house or your normal worksite location than you are entitled to deductions for every mile.
Just make sure you keep track of the miles spent on the odometer and have a record of the miles traveled for work purposes. In the end, It all comes back to how you relate things back to your job. Almost anything you can think of that has to do with your work can be eligible for a tax deduction. However, there are a few exceptions to that rule.
While you can get large deductions for work related expenses, it can get a bit complicated when trying to figure out everything that counts as work related expenses. For example, you need gas for your car to get to work. However, you are not allowed a deduction if you always work in the same location.
This same sort of exception applies to expenses related to food and to grooming as well. You are not eligible for deductions for food unless you are traveling for work or working overtime. In addition, you obviously need to remain well-groomed for your job, but since that is already expected of you there is no tax deduction. In addition to this, any entertainment expenses incurred either on the road for work or in your personal time is not tax deductible. In essence, the only tax deductible purchases would be things you would need to be able to do your job, not on unecessary or frivolous expenses.
There is a multitude of ways related to work to find tax deductions. The key to knowing whether or not your expense is eligible for a tax deduction is to ask yourself if the purchase was for work and if it is an unexpected expense.
This means things that you would normally do such as eat lunch, get haircuts, and drive to the office are not eligible for deduction. However, if you have to travel between locations, or you have to eat meals while traveling for work, you are eligible for deductions. Make sure to follow these basic guidelines, and make sure to do a little more research if you are unsure. Finally, be sure to record all of your tax-deductible expenses when they happen to better keep track. This information will help you greatly come tax season.
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