Tax Write Offs

No one is born knowing the ins and outs of all the tax write offs available to the average American. This is especially true with all the revisions and opportunities that the IRS makes available every year. In fact, because there’s so many opportunities to find tax write offs, it can be overwhelming to know where to begin! Fortunately, to Find a Tax Professional for Tax Write Offs is as easy as hiring BTL & Company, PC, Tax & Accounting to take care of the difficult tasks of taxes. This article will show you what tax write offs are and what money-saving opportunities can be available, many of which our qualified Accountants save for our clients daily.

So, What’s a Tax Write Off?

 Simply put, a tax write off is an expense that is able to be deducted from taxable income on tax returns, whether they are personal or for business. This includes legitimate expenses of doing business or the depreciated value of and taxable asset. In the US, the Internal Revenue Service handles tax the administering and collecting of taxes. So, when you are filing your taxes, you may be entitled to reimbursement from things that the IRS deems worthy of reimbursing by way of tax write off.

Who’s Entitled to Write Offs?

 Individuals, whether they work for an employer or are self-employed, are entitled to a set of write offs specific to their living circumstances, family size and dependency, and other factors.
 Corporations and small businesses are also entitled to write offs. Because of their nature, these types of entities are different than what individuals can claim on their tax returns and bear different types of financial responsibility (ex. accounting methods).

What Types of Write Offs Are Available?

 Items that can be written off are specified by law. Most often, these expenses are usually incurred when an entity produces income and aren’t related to personal expenses.
 Some examples of valid write offs are:

• Interest incurred from student loans
• Donations to qualified charities
• Employee moving expenses
• Business use of your vehicle
• Cost of goods sold
• Gambling losses and gains

Because every industry and individual is different, it is in your best interest to do extensive research on your particular circumstances. This is why it is smart to Find a Tax Preparer that is aware of the many write offs available to you and how they change from year to year.

Can I Write It Off? Tricky Deductions

 Not every write off is easy to see or justify. Because the IRS is responsible for ensuring that individuals and businesses pay their required taxes, they are also tasked with finding tax fraud and exaggerations that can lead to an audit and significant financial penalties.

 Let’s look at some examples:

• Home  offices: Self-employed individuals or those that work at home may choose to write off their home offices. However, the IRS has been on the lookout for those that exploit this deduction. Because of this, it is necessary that the space of the home office is used exclusively for work and is not mixed-use. To properly calculate how much your home office entitles you to, measure the square footage of the work space and divide this from the total footage of your home. This yields a percentage that is applicable to your rent and utilities that is legal to write off. However, to be sure, a contractor can be hired to measure the area and state it in a document.
• Uniforms: A good rule of thumb for costumes or uniforms that are valid write off is to determine whether you could wear it outside the job. If you cannot, then it is a valid write off. But what about actors or even exotic dancers that have a large wardrobe to facilitate their work? When encountering this grey area, it is worth it to consult a Tax Preparer that can give you an accurate idea of how much you can write off.
• Guard Dog: While you may not normally consider this write off if you own a Chihuahua, you are entitled to a write off for guard dog expenses only during the hours that your pooch is devoted to guard duties. For instance, you can claim deductions for services related to cleaning up your dog’s bodily functions if the animal is guarding your business! You can call that a woof off!

Non-Deductible Items

 Unfortunately, there are a few things that are explicitly stated as not being a valid write off. Let’s take a look at a few examples:

• Political  Contributions: Whether you lean left or lean right, candidates for political office or political parties are not qualified for the write offs, as they do not have 501©(3) status, like charities.
• Child  Support: While the IRS offers help for families through Earned Income Tax Credit (EITC) and the child tax credit, child support from a divorced parent is not tax deductible. However, alimony is the only type of support that is eligible for tax deductions.
• 529  Contributions: Funding your children’s education by contributing money to a 529 Plan is smart decision for the future. Unfortunately, the IRS does not deem this worthy as a valid tax write off.
• Roth IRA  Contributions: Having a Roth IRA is a good decision for your retirement, as the income distributed is tax-free. But for the same reasons, contributions to your Roth IRA cannot be used as a write off.