Seven Major Tax Breaks You Can Take to Decrease Uncle Sam's Share

Tax is a little word with a big punch, striking fear into the heart nearly every working American at least once or year (or sometimes every few weeks, when you see that deduction from your paycheck). Doing your taxes is difficult enough, and then at the end of your process, you might find yourself surprised by a hefty and unexpected bill. The good news is that there are ways you can save yourself some money while doing your taxes. Take the time look for the tax breaks that are available to you, and make use of them. You may even find Uncle Sam needs to send a check to you.

Before you can start making the seven major tax breaks out there work for you, you'll need to do a little organizing. For the best results, you should be doing your organizing all year long. Save your receipts and keep them tidy and sorted. You never know which purchase could be a tax deduction winner, so save everything you can. This might get a little tedious at first, but when you start reclaiming that money, you'll be glad you did it.

With all of your paperwork in place, now you can start considering the tax breaks that apply to you. The first major tax breaks comes from expenses you have incurred while working for someone else. You can claim back your lunch money, your travel money (including car ownership), employment related insurance, like malpractice insurance, business gifts, and even your work clothes. If you have been hunting for a job, you can deduct expenses accrued during the job search, like traveling to interviews, or money spent on job training classes.

The second break comes in the form of self-employment. If you are self-employed, nearly everything you buy can be written off on your taxes, from your fax machine to your industry related magazine subscriptions to the roof over your head. Self-employment is one of the best tax havens out there. Tax break three is another great tax haven - home ownership. If you own a home, you can deduct your mortgage payments, property tax, and sometimes even home insurance.

Tax breaks number four and five have to do with donations, both charitably and donations to you. Charitable donations, except donations to political campaigns, are always 100% tax deductible, and are a great way to keep your tax bill low. Donations to into your IRA account or towards repayment of student loans are also tax deductible.

Tax break number six is related to your investments. If you had to make an early withdraw from a savings account and paid a penalty, that penalty is tax deductible. If you had a major investment loss, that loss can be deducted from your taxes. Even money spent to get investment advice or fees charged by your investment banker is 100% tax deductible.

The seventh major tax breaks falls under the name tax breaks for individuals. These are deductions include things like the child tax credit, education tax credits, and tax credits for having paid foreign taxes.

With a little research, you will see that there really is a tax break out there for everyone. The trick is to find yours. If you're new to the deduction game, a great idea is to find a financial advisor who can walk you through the process and find deductions for you that might never have considered in the past. And of course, don't forget, that money you spend on a financial advisor - completely tax deductible.

TaxChronicle.Com Home | Articles and More About Federal and State Taxes
Contact Us | Resources

Copyright © 2007 [TaxChronicle.Com]