Things you don't know about taxes, like deductions and credits, can cost you at tax time and you can wind up paying more money to Uncle Sam than required.
To save money, remember work-related expenses, including:
• Occupational expenses that you're not reimbursed for, such as union dues, tools for professional journals and special clothes, amounting to more than 2 percent of your income.
• The cost of obtaining and maintaining professional licenses, including the licensing fees.
• Memberships in professional organizations.
• Subscriptions to professional publications.
Keep track of your expenses throughout the year that aren't work-related. If you wait until that big medical expense hits you in November, it's difficult to reconstruct the expenses you incurred along the way. Potential deductions may include state sales tax deduction vs. state income tax deduction, tax preparation fees, medical bills and equipment, safety deposit box fees, gambling losses and charitable donations, which you need to keep receipts for.
You also can save some money on your mileage if you itemize. Certain mileage can be deductible, including:
• Medical mileage can be claimed at 20 cents per mile for trips to doctor's appointments, the hospital and the dentist.
• Volunteer mileage can be claimed at 14 cents per mile if you drive for organizations like Meals on Wheels, run errands for organizations or drive kids to the campground for scouting activities or other clubs.
• Work mileage can be claimed at 48.5 cents per mile if you conduct business-related errands or incur mileage between job sites. Mileage between home and work is personal and non-deductible.
At times, deducting your actual vehicle expenses will result in a larger deduction. Keep track of oil changes and gasoline usage, insurance and auto repairs. You must keep track of the total miles driven, for personal and business use, and then allocate the actual expenses between the two.
Everyone knows you can deduct mortgage interest. But did you know that you can also deduct interest on home equity lines of credit and second mortgages? Certain limitations apply, so check with your tax professional for details. For 2007 only, if you were required to pay private mortgage insurance on a new or refinanced mortgage, you may be able to deduct those premiums.
Hiring your kids to work for you also can save you money on your taxes, as well as keep them busy. Have the kids help out with filing, cleaning or answering the phones. Hire and pay them appropriately and you could deduct their wages from your business income. Most importantly, keep accurate records of the time worked and amounts paid.
For more information, call an H&R Block tax professional at (760) 433-1040.
To save money, remember work-related expenses, including:
• Occupational expenses that you're not reimbursed for, such as union dues, tools for professional journals and special clothes, amounting to more than 2 percent of your income.
• The cost of obtaining and maintaining professional licenses, including the licensing fees.
• Memberships in professional organizations.
• Subscriptions to professional publications.
Keep track of your expenses throughout the year that aren't work-related. If you wait until that big medical expense hits you in November, it's difficult to reconstruct the expenses you incurred along the way. Potential deductions may include state sales tax deduction vs. state income tax deduction, tax preparation fees, medical bills and equipment, safety deposit box fees, gambling losses and charitable donations, which you need to keep receipts for.
You also can save some money on your mileage if you itemize. Certain mileage can be deductible, including:
• Medical mileage can be claimed at 20 cents per mile for trips to doctor's appointments, the hospital and the dentist.
• Volunteer mileage can be claimed at 14 cents per mile if you drive for organizations like Meals on Wheels, run errands for organizations or drive kids to the campground for scouting activities or other clubs.
• Work mileage can be claimed at 48.5 cents per mile if you conduct business-related errands or incur mileage between job sites. Mileage between home and work is personal and non-deductible.
At times, deducting your actual vehicle expenses will result in a larger deduction. Keep track of oil changes and gasoline usage, insurance and auto repairs. You must keep track of the total miles driven, for personal and business use, and then allocate the actual expenses between the two.
Everyone knows you can deduct mortgage interest. But did you know that you can also deduct interest on home equity lines of credit and second mortgages? Certain limitations apply, so check with your tax professional for details. For 2007 only, if you were required to pay private mortgage insurance on a new or refinanced mortgage, you may be able to deduct those premiums.
Hiring your kids to work for you also can save you money on your taxes, as well as keep them busy. Have the kids help out with filing, cleaning or answering the phones. Hire and pay them appropriately and you could deduct their wages from your business income. Most importantly, keep accurate records of the time worked and amounts paid.
For more information, call an H&R Block tax professional at (760) 433-1040.