Tax Deductions You May Not Have Known About

Tax Deductions You May Not Have Known About

June 13, 2020

Few of us really like paying taxes. Everyone can think of plenty of other expenses they would rather spend that money on but, nonetheless, our duty as citizens is to pay taxes. However, extra tax deductions in Hayward, CA can reduce the amount of taxes that the government receives from you every year.

Deductions you can take on your taxes

If you’re not an accountant or financial expert, you probably aren’t familiar with some of the extra tax deductions in Hayward, CA that might apply to you:

  • Other taxes: On your federal taxes, you can deduct sales taxes or state income tax. The sales tax break is great if you made a large purchase during the previous year. For states without an income tax, you want to deduct this amount from your federal taxes. You would need itemized records for these deductions, so keep receipts, statements and invoices. Consult an accountant, because you may be able to deduct local real estate and property taxes as well.
  • Charitable giving: Donating money or goods to a 501(c)(3) nonprofit organization is a great way to deduct a little more from your taxes. But you can also deduct the costs of items used for the charity. The ingredients for cookies you make for a bake sale and the supplies for an art piece to be sold at a charitable auction are just a few examples of additional deductions you can take on your taxes.
  • Continuing education: Depending on your income level, you may be eligible for the Lifetime Learning Credit. This provides up to $2,000 in post-high school education, or you may take 20 percent off the first $10,000 you spend.
  • Health insurance premiums: For those who are self-employed and cover the full cost of their health insurance premiums, you may be eligible for up to a 100 percent deduction of this expense from your taxes. This number is subtracted from your adjusted gross income (AGI) rather than applied as an itemized deduction.
  • Unexpected business expenses: When you own and operate your own business, you will spend money on unexpected costs. If you run a nursery that attracts rodents, you might buy cat food to encourage the local strays to come by for a meal while also chasing off your pests. By documenting the expense and having a demonstrated reason for them, you could technically deduct this expense.
  • Self-employed Social Security: Companies deduct Social Security and Medicare taxes from employees’ paychecks. When you’re self-employed, it’s your responsibility to pay that money out of your earnings for a total of 15.3 percent. However, you do get to deduct 7.65 percent in the end because an employer isn’t paying those taxes for you.

The Internal Revenue Service does not make it easy to figure out extra tax deductions in Hayward, CA. That is why clients have brought their taxes to Menjivar & Company CPAs, Inc. for more than four decades. Our family-owned and operated accounting firm is here to help you receive the largest tax refund possible, so call us today to make an appointment to discuss your taxes.

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