Whenever people came to me to get their taxes done, they wanted to know what to put down to get more money back.
While there are multiple ways to prepare taxes, some are better than others. If you go to a professional, they will figure it out for you but if you do your own taxes you might want to consider the following:
1. The gym
Many people try to deduct the cost of attending the gym, especially with the recent gym craze. Unfortunately, expenses that are merely beneficial to your health are not deductible. Don’t pout just yet. If you can get your doctor to prescribe you a gym or a health club membership for a medical condition (keep in mind, it’s a broad category) you can qualify for a deduction.
2. Pets
The year the IRS required to list social security numbers for all dependents being claimed, millions of dependents were dropped. That seems like an awful lot of people but many of these so-called dependents were people’s pets. Pets cannot be claimed as dependents and the costs associated with them are typically not deductible unless you are maintaining them to assist you with your medical condition or you’re using them for business purposes. For example, a business that uses cats to get rid of rats in a facility can deduct the costs of keeping these cats as a business expense.
3. Don’t be greedy
Only the amount considered reasonable can be deducted. If you employ your brother and pay him $10,000 more than you pay an average employee for performing similar work, only the reasonable amount will be deductible. You won’t be able to deduct the extra $10,000 unless you can prove that your brother’s work was somehow more beneficial to your business. You could probably dodge the IRS’s radar if you aren’t too greedy by not overstating this expense by too much. It would be safest to stay within the national pay range if you want to take advantage of this deduction.
4. Make the time work for you
Schedule an appointment with your doctor in the last few months of the year. This will allow you to deduct more medical expenses if you get a check-up or receive treatment.
Sometimes it can be more beneficial to itemize instead of taking the standard deduction. Paying property taxes before December 31 can increase your itemizing potential.
Paying off mortgage before December 31 that is due in January allows you to take a bigger interest deduction.
& remember … the risk of cheating on your taxes far outweighs the benefits.
Check back in a few weeks for more tax tips.