Preparing for Tax Time
If you are going to itemize your expenses for tax time, document everything. If you are audited, you will need the documentation to prove the deductions that you are trying to take.
1. Non-reimbursed business deduction
If you have business related expenses that are not reimbursed by your employer, keep the receipts and you can deduct 50% of these expenses on your taxes. Examples of expenses that are allowed under this deduction are business meals, entertainment, uniforms, and many others. However, there are requirements that must be met in order for these deductions to be taken. For example, uniforms are allowed to be deducted, including the cost to dry clean the uniforms, if the uniform isn’t the type you would wear outside your workplace environment, such as a policeman’s uniform. Be carefule though. A suit doesn’t apply as even though you may not want to wear it once you leave work, you can still wear it out to dinner.
2. Non-reimbursed health care deduction
Target receipts make this deduction much easier to track. At the bottom of their receipts, they now tract the amounts of each transaction that can be deducted as a health care expense or for which you can be reimbursed if you have a health savings account. This is extremely helpful. I didn’t realize that I could deduct the cost of my lip balm until I saw it added to the deduction amount at the bottom of my receipt. Again, you need to keep your receipt to prove you had the expense. This expense is also only for taxpayers who itemize.
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