9 Easy Ways to Reduce Your Bills with Tax Deductions

9 Easy Ways to Reduce Your Bills with Tax Deductions

This is a guest post by Kreig Mitchell, a Houston Tax Attorney who provides thoughtful and experienced advocacy on behalf of clients in federal and state tax planning and disputes nationwide. He also handles disputes with the IRS and state tax authorities for both businesses and individuals. He has represented businesses ranging from entrepreneurs to multinational corporations, in industries such as high technology, manufacturing, oil and gas, and government contracting.

The only thing permanent in this world is taxes, as the famous saying goes.

Let’s be honest here- no one actually likes paying taxes. But we still do it because it is our duty as citizens to do so.

The whole tax process can be confusing, confounding, and tedious. However, there are some things that you can do which would make the whole thing a lot more bearable (and most of all, less expensive).

The Tax Deductions You Might Be Overlooking

The key here is to learn and take advantage of the tax laws that can benefit you (believe it, there are many).

Be aware of every tax deduction that you can avail and use it. It might take some time to sort through all of this information (detailed info about tax deductions is available on the IRS website), but you’ll be able to save A LOT on your tax bills so it’s going to be all worth it in the end.

At any rate, here are some of the easy ways to which you can get your tax bills reduced:

1. Deduct Home Office Expenses.

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If you work remotely or have another side-business that is home-based, you are eligible for home office deductions.

Under the law, you can legally deduct the percentage of your house expenses that you are using as an office.

For example, if your home office takes up about one-fourth of your house, then you are free to deduct one-fourth of your total utility bills (and rent, if you’re paying any) from your taxes.

2. Give to Charity.

Altruism always pays off. You can get a write-off for 50% of what you give to charity every year (subject to limitations, gifts to charity is deductible).

Just make sure that you’re able to keep track of the charity gifts that you make during the year so that you have valid documentation when tax deductions time comes.

3. Stash Your Money in a Retirement Fund.

All the contributions that you make towards a 401(k) will not be included in your taxable income.

Up to $18,000 can be deducted through this method, and this can go up to $24,000 if you are aged fifty or older.

4. Try to Get a Health Tax Break.

See if you employer offers something called a flex plan, which is another name for a medical reimbursement account.

Just like with the retirement fund, having a flex plan allows you to stash away part of your salary to an account that you can be used for medical bills and won’t be taxable.

The maximum that you can deduct from your taxable income through this method is $2,700.

Another advantage of having your money in a medical reimbursement account includes not having to pay both income AND Social Security tax on the money.

5. Deduct Your Educational Costs.

If you’re currently paying for college, you can get up to $2,500 off your tax bill for four years through the American Opportunity Credit.

You must be enrolled in an eligible post-secondary program for you to qualify for this deduction. This is available for single filers with an adjusted gross income of $65,000 ($130,000 for joint filers).

There’s also a program called Lifetime Learning credit that you can use to deduct up to $2,000 from your taxable income if you’re not eligible for the tax deductions mentioned above.

6. Combine Your Vacation Times With a Business Trip.

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Merge your business trips with your holidays.

Not only do you get to decrease the cost you spent on your holidays, but you also get to save on taxes too. Just subtract the amount of the reimbursed business expenses from your total vacation bill.

7. Get All The Deductions When You’re Self-Employed.

If you’re self-employed, then you’re in luck. You are eligible for tax deductions that go into the running of your business.

This can include everything from website fees, home internet bills, supplies, electricity bills, advertising fees, subscriptions, business trips, and any other thing that you spent on while working from home.

This applies to all those who are self-employed- full time or part time.

Here are some bookkeeping tips for you if you’re working for yourself.

8. Reimburse Your Vehicle Expenses.

Yes, you can get tax deducations on your vehicle too. This is something that is commonly overlooked by most taxpayers.

If you’re using your personal car for business purposes, you may be able to deduct mileage costs from your taxes.

9. Deduct Your Student Loans.

You are able to deduct up to $2.500 if you’re still paying for your student loans.

This is available for single filers with $60,000 in adjusted gross income (120,000 for joint filers).

What do you think about the 9 tax deductions listed above? Which ones apply to your situation and how can you start saving money today?

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5 Convincing Reasons to Start a Business in Your 20s and 30s

5 Convincing Reasons to Start a Business in Your 20s and 30s

Every day we hear about brilliant minds who have made their first million before the age of 25. There are even businessmen who reach success and experience the advantages of self-employment before they turn 21. This influx of young gifted entrepreneurs makes you think there is no room for startupers over a certain age in any industry. But is it really the case?

Seasoned business analytics and researchers say there is no ideal age to start a business. You can be a successful entrepreneur fresh out of high school, but it’s also not uncommon for people in their 40s to finally find their entrepreneurial path. However, 20s and 30s remain the most popular age for starting a business, and that’s what we’ll focus on today.

Why Start a Business in Your 20s and 30s

1. Risk-taking

The importance of taking risks and accepting the outcome of your decision doesn’t need any explanation for entrepreneurs. As a startup founder, you will face risks every day, and this is where a person with more business expertise can encounter their first difficulties.

When someone is over 40, they’ve likely already taken big risks and failed. It means that they’ll be much less inclined to do it again. This is how older businessmen think they avoid complications, but that is also how they miss opportunities.

People in their 20s and 30s normally don’t have that kind of experience. They understandably have qualms about risk-taking. However, in the end, they usually decide to make a risky move, and there is a very good chance the risk will pay off.

Related: 4 Ideas for Side Hustles You Can Start This Weekend

2. Knowledge

Those who launch their business after 40, usually have certain business experiences under their belt. They may have taken part in starting their own business or witnessed the birth of a business of a friend or coworker.

When you’re in your 20s or 30s, you may not have the same real-life knowledge of how businesses begin. Nevertheless, you have something much more important: the knowledge and skills you received at college.

The importance of college education for launching a prospering business is often overlooked. Yet there are essential things you can only learn in college, and that’s exactly the foundation you need for building a viable business.

3. Responsibilities

By the time they are 40, people accumulate a lot of financial responsibilities. Families, mortgages, car payments, and medical expenses not only eat up a large part of your budget but also make you much less flexible.

It’s a popular thought that businessmen in their 20s and 30s have nothing to lose. That may not be completely true, as some people start families when they’re fairly young. However, when you’re under 40, you have more freedom for making choices.

If you’re a forty-something father of three, your business decisions will be dictated by the risks you’re able to take. Young people have fewer things restricting them from making bold decisions and, ultimately, succeeding.

Related: How to Start a Profitable Blog – This step-by-step guide to starting a blog is a must for everyone who wants to start earning online and become self-employed. Having your own blog is the first step to selling products, making money from affiliate marketing, building a name for yourself, getting traffic and monetizing that attention.

4. Resilience

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If there is one thing experienced entrepreneurs would like every beginner to know, it’s that launching a business will be a journey filled with ups and downs. If you look at business success stories, you’ll see that each of them comes with their share of failures.

Impressionable young businessmen don’t react great to failures. Their initial reaction can differ, but it always includes disappointment, resentment, and even a desire to quit. If they’re lucky, their support system won’t let them quit. If they’re not, then the days of their startup are numbered.

It’s a different story with people in their late 20s and 30s. They arrive at the starting point of their business with an understanding that failures are bound to happen. It doesn’t mean that they’re completely immune to failures, but they are guaranteed to have a more mature reaction.

5. Technology

Technology is a vital part of launching a startup these days. There are thousands of businesses that only exist online. Even if your business is completely offline, technology can still be a valuable aid in the business development.

People over 40 may understand the importance of using technology in their business. They may even move their business online or take successful steps to foray into the digital world.

However, they will never have the understanding of technology of a 28-year-old.

Today’s 30-year-olds are not only fully familiar with technology – many of them are actually digital natives. These people have spent most of their lives with the digital world being an essential aspect of living. That is why technology-skilled young entrepreneurs are the future of business.

Conclusion

According to those who have a multi-faceted experience in business, starting a business at any age has its challenges. Entrepreneurs that are 20, 30, 40, or 50 years old have their strong suits and weaknesses. However, there are many reasons why the age between 20 and 40 is the golden age for launching a business. Take risks, learn as you go, use your forte, don’t let anything distract you, and soon your name can be part of the world business hall of fame!

About The Author

Christine Acosta is a content manager at App Reviews. She specializes in digital marketing and content creation. Christine is also passionate about startups and business development. She uses her degree from the Florida Institute of Technology to offer sound advice to those who launch their own business.

starting a business at any age has its challenges. Entrepreneurs that are 20, 30, 40, or 50 years old have their strong suits and weaknesses. However, there are many reasons why the age between 20 and 40 is the golden age for launching a business. Check out this post to see what they are: #startabusiness #newbusiness #smallbusiness #bossbabe