Tuesday, May 9, 2017

Tax Money Smarts

Consider bunching your tax deductions- --  When calculating annual federal income taxes, you can choose between the standard deduction and itemized deductions. The full amount of the standard deduction can be used regardless of the actual deductions to which you're entitled. Bunching itemized deductions in alternate years allow you to maximize the use of these deductions, and reduce you tax liability. In other years, when few deductions are available, you are able to claim the standard deductions. For example, make next year's planned charitable contribution one year early, and combine  the deductions with this year's contributions. You may be able to bunch certain state and local tax payments in alternate years as well. Itemize in the year when you have lots  of deductions and use the standard deduction the following year. During the year you use the standard deduction, delay deductible expenses until the following year.

When you have an online or home based business, you may be able to deduct certain expenses from your income taxes, such as a room as an office space in the house.

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