With the deadline for efiling taxes right around the corner, you may be one of the last people to calculate your dues to If you’ve already filed, you may be looking for ways to save on next years tax bill. Either way, read these 5 tax breaks you should take advantage of so you can be prepared when the tax collector comes calling.
1. Charitable Donations
This category encompasses more than just cash donations. It also takes into account any clothes donated to thrift shops or household goods given to a charity organization. When you donate items, ask for a tax slip so you can write your good will off on your next tax bill.
2. Retirement Savings
If you’re low or moderate income, the government will reward you for contributing to your retirement account. While you may be deferring payments right now because of market volatility, once your contributions recover, you can get a nice tax break for adding to your retirement account.
3. Medical Expenses
Your hospital bills need to be pretty hefty to claim this deduction, but if you have had a major operation or health problem in the last year, you may want to keep reading. If you spent more than 7.5% of your total income on medical bills, you qualify for a deduction. Keep in mind that this number is set to rise to 10% for 2013 taxes.
4. Moving Expenses
Have you moved recently? If the answer is yes and the move was related to a job, you may have a deduction. In order to qualify, your new job must be more than 50 miles from your home and you need to be employed full-time for at least 39 weeks during the first 12 months of your relocation. There are certain conditions that waive the time requirement including death, layoffs and more.
5. Disaster Strikes
If you live in an area that is hit by a major disaster such as a hurricane, your rebuilding and recovery costs may be deductible. Smaller disasters such as house fires and burglaries are also eligible for savings.
Taking advantage of every possible tax deduction can lower your liability and increase the amount of pay you get to keep. Know what the current tax laws are and how they apply to your situation to maximize your benefits. Many people don’t take advantage of all of the tax deductions they qualify for simply because they don’t know that they exist. Don’t be on of the people that pay too much – know what you can deduct and reduce your tax bill dramatically.