Every taxpaying citizen in the United States has heard of a tax write-off or tax deduction. It’s a word bandied about in movies and the press when discussing how the wealthy protect their income. The infamous story that billionaire Warren Buffett pays a lower tax rate than his secretary, thanks to his swift financial footwork, is commonplace. Unless you have a business degree, you’d be forgiven if your knowledge of write-offs began and ended around there.
But it doesn’t have to. Tax write-offs aren’t just for the super-rich. You can use deductions and write-offs over and above the standard deduction to improve your bottom line in time for the next tax year.
For anyone wondering, “What are some common tax write-offs in Hayward, CA?” here is your answer.
Itemize your deductions
When your tax preparer looks at your total taxable income, they can apply the standard deduction (which subtracts a set amount from that number). Or, they can look at your spending over the previous year and pinpoint eligible costs that they can apply toward itemized deductions.
If the amount of itemized deductions exceeds the amount offered by the standard deduction, then your financial planner will recommend itemizing. Itemized deductions are payments made to tax-eligible goods and services that reduce the amount taxed on your annual income.
Charity adds up
Of all the possible answers to the question of “What are some common tax write-offs in Hayward, CA?”, charity may be the most meaningful. Whether you’re donating your hard-earned money to your favorite causes, or you’re donating your old clothes and household items to the nearest Salvation Army, charitable contributions are good both for your fellow humans and your tax bill. Just be sure to keep your receipts.
Softening the blow of medical expenses
If you’ve spent an unusually large amount on medical or dental expenses over the previous year, you could be in for a significant deduction. Typically, if your medical expenses surpass 7.5 percent of your annual income, you could be eligible for a tax break. Now there’s a silver lining to all the time you spent in the doctor’s office.
Your mortgage insurance and your property taxes could both be tax deductible in a big way. Owning your own home is harder than ever these days, so if you can take advantage of tax breaks to make the process easier, then all the better.
The tip of the iceberg
What are some common tax write-offs in Hayward, CA? You’ve just seen some of them, but that’s just the beginning. While your charity, medical and home-based expenses can prove game-changers for your tax bill, they’re just the tip of the iceberg.
You’d be astounded at the success you can have during tax time when you put your taxes in the hands of a talented tax preparer. For more than 40 years, the pros at Menjivar & Company CPAs, Inc. have worked tirelessly to help our clients in the residential and small business markets. When you need an ally to help you get all the tax deductions you deserve, no one does it better than us. Call to schedule an appointment today!
Categorised in: Tax Tips