According to IRS data, the majority of Americans choose to take the standard deduction when they file their taxes.
This means instead of taking tax deductions for expenses like mortgage interest and moving costs, they choose a set deduction of around $6000 for single people and around $12000 for married couples.
While this may be the simpler approach, it’s not necessarily the smartest. If you know how to use creative tax solutions to your advantage, you may be able to deduct much more than the standard deduction from your income.
Ready to find out how to save more on your taxes? Consider these creative tax solutions.
Creative Tax Solutions For Unusual Business Expenses
If you own and operate your own business, you may feel like you are always spending money on it. As a matter of fact, the average small business owner spends around $30,000 just to get their business started.
Luckily, you can deduct a lot of these expenses from your income.
But many business owners assume this only includes costs like travel and equipment. In reality, you can deduct just about anything if you can demonstrate you need it for your business.
Need a dog to guard your shop? Deduct the dog food. You can even deduct baggage fees if you have to travel for your business.
You might even be able to deduct expenses related to maintenance on your vehicle or maintaining your phone plan. Be careful, though, because you may need to demonstrate that you only use these items for business purposes.
Have you ever gotten carried away at the casino and lost more money than you were planning on?
While this can be unfortunate, it can also provide an opportunity to take a tax deduction. The only catch is that you cannot deduct more in gambling losses than you report in gambling wins.
If you are a generous person, you might find yourself lending out money that you don’t get back. Fortunately, you may be able to deduct this loss from your taxes.
To qualify, you will have to prove that you made an effort to get the money back from the debt, and that you will not be able to be repaid.
Charity and Volunteering
Most people know that you can deduct charitable contributions from your income. But they may not realize that there are some creative ways you can maximize this deduction.
For instance, if you volunteer regularly, you might be able to deduct your gas and vehicle maintenance expenses.
Or, if you need a babysitter to watch your children while you are volunteering your time, you can deduct the costs you paid to the babysitter. You can also consider deducting expenses for materials bought for volunteering.
Try Creative Tax Solutions Today
With these creative deductions that you can take on your taxes, you may be surprised at how much you can save. If you want to learn more about how you can maximize your refund this year, contact us to speak with a tax professional and get started.