Being in tune financially is invaluable when having to budget a whole household. As a parent, being financially savvy means taking advantage of all the tax exemptions and deductions available for your family. After all, a family may be able to save more on their taxes than an individual taxpayer. Maximize these opportunities to save, and plan better for your family’s future.
Evaluate Your Medical Expenses
If you are taking the standard deductions rather than itemizing, you may be missing a number of various write-offs. A surprising number of medical expenses qualify for deduction. Anything out of pocket going towards prevention, diagnosis, or treatment of a medical condition qualifies. Additionally, transportation to the location of where healthcare is provided also counts along with prescription drugs.
Your employer-based insurance premiums (over 10%) are fair game. If you are self-employed, you are able to deduct the cost of medical premiums.
Assess Your Education Costs
If any family members attend college, you are able to claim a deduction without having to go through the trouble of itemizing. You can claim up to $4,000 a year on tuition for higher education. The American Opportunity Credit also offers $2,500 for all four years of enrollment at a college, depending on income.
Include Your Dependents
Those that qualify as dependents aren’t always blood related or living in your household 365 days a year. You are able to claim a dependent as long as the individual relies upon you for at least half of their support.
Add Up Your Moving Expenses
If you are moving for a job, deductions cover every member of the household. There are a number of deductions that you may be able to take advantage of, however you must meet both a time and distance requirement. Your new house must be located at least 50 miles farther away than your old work location was to your old house. If this holds true for your case, you are able to deduct expenses such as lodging and transportation for the entire family.
Calculate Your Child Care Costs
In order to take advantage of their deduction, you must be hiring child care while you are at work or looking for work. The write-off can amount to 35% of the cost of care, and can be multiplied for each child that needs care. This deduction applies to other dependents as well, such as a spouse or elderly parent who requires at-home support.
Account for Your Home Office Expenditures
One in five Americans work from home, and yet many of these individuals do not take any deductions. While there may have been rumors in the past that indicated home office deductions were more scrutinized by the IRS, nowadays it has become easier to claim these types of deductions through a simplified method. The IRS offers the option of simply multiplying the square footage of your office workspace by $5 to arrive at your deduction amount.
As tax season is quickly approaching, be sure you are taking full advantage of all the deductions and exemptions at your disposal. Use these 6 tips when filing your taxes to be sure you’re saving up for your family.