It’s Tax Time! It’s that time of year that either you love the government (because you expect a hefty refund or hate the government (because you owe Uncle Sam). As an experienced tax preparer for over 15 years I try give my clients tips and tricks to getting a better refund or to pay less taxes every year. While the tax laws change from year to year there are some credits that are frequently overlooked.
1. If you paying for Daycare and other Dependent Care Expenses. There are certain credits and deductions such Earn Income Credit, Dependent Deduction, and Child Tax Credit that are used to reduce your taxable income and in-turn put you in refund status. However you can also use your employer’s Flexible Spending Plan (FSA) to get double the benefits as this too can reduce your taxable income for a bigger refund. The minimum and maximum amounts you can contribute to the Dependent Care FSA are set by your employer, although the maximum allowed by the IRS is $5,000 a year for individuals or married couples filing jointly, or $2,500 for a married person filing separately.
2. If you a have a Small Business- When you have a small business you have the benefit from various deductions listed Schedule C- including Advertising, Use of Car Mileage and Maintenance, and Business Use of Home just to name a few. When listing expenses on a Schedule C make sure you are keeping accurate and detail records for at least 5 years as any tax return with a Schedule C has a higher risk of an audit because of all the expenses and credit that can be used on the form.
3. Looked for a job in 2016? Although 2016 had a low unemployment rate there was still a pool of Americans actively looking for job and had expenses related there search. Job Expenses as paid job coaching, resume writing and materials (included technology and postage), and head hunter expenses can deducted on the Schedule A.
4. For the taxpayers that use the Earned Income Credit or the Child Tax Credit you will have a delayed in the release of your refund until third week in February. The first day to e-file is Monday January 23, 2017., always look for a qualified tax preparer to prepare tax return it’s one of the most important documents you we file and send to the US government.
You can reach out me if you are in need help in completing your 2016 tax return I have 13 years of preparation experience in getting my individual and small business clients the maximum refunds or less tax liability with the legal use of tax deductions and credits