{"id":4943,"date":"2021-05-20T11:19:51","date_gmt":"2021-05-20T18:19:51","guid":{"rendered":"https:\/\/www.accountingaccidentally.com\/?p=4943"},"modified":"2021-07-22T14:24:41","modified_gmt":"2021-07-22T21:24:41","slug":"5-things-you-maybe-didnt-know-were-tax-deductions","status":"publish","type":"post","link":"https:\/\/www.accountingaccidentally.com\/5-things-you-maybe-didnt-know-were-tax-deductions\/","title":{"rendered":"5 Things You (Maybe) Didn’t Know Were Tax Deductions"},"content":{"rendered":"

\"\"

Most of us, whether running a business or filing taxes as an individual want to ensure that we are as efficient as possible at holding on to as much money as possible and reducing our tax burden as effectively as possible. However, many of us simply are not aware of the various deductions we could be making, which means we end up paying more tax than strictly necessary.<\/p>\n

 <\/p>\n

With that in mind, let\u2019s take a look at a few things you may not have known were tax deductions\u2026 consult with a CPA regarding tax issues.<\/p>\n

 <\/p>\n

Have a question about personal finance or entrepreneurship? Join the Ask Me Anything<\/strong> live chats<\/a> on Conference Room<\/a>.<\/p>\n

 <\/p>\n

    \n
  1. Sales taxes<\/strong><\/li>\n<\/ol>\n

     <\/p>\n

    If your state doesn\u2019t have an income tax of its own, you can save a money by deducting sales tax paid on asset purchases. Using the sales tax break could still give you a better deal if you happened to make a particularly large purchase, such as a vehicle, in a particular tax year.<\/p>\n

     <\/p>\n

     <\/p>\n

     <\/p>\n

     <\/p>\n

      \n
    1. Teaching materials<\/strong><\/li>\n<\/ol>\n

       <\/p>\n

      Due to budgeting issues, most teachers will have needed to buy extra supplies<\/a> for their classes. If you\u2019re one of them, it may be worth noting that these could be tax-deductible. Providing you\u2019re a K-12 teacher, you can deduct as much as $250 for supplies, which may not seem like a whole lot, but every little helps. Oh, and you don\u2019t even need to itemize, which is a nice bonus.<\/p>\n

       <\/p>\n

        \n
      1. Lawsuit settlements<\/strong><\/li>\n<\/ol>\n

         <\/p>\n

        If you run a business and you are subject to a lawsuit, which is within the time limits for filing a lawsuit<\/a>, and which is successfully filed against you, you may be able to claim the settlement as a tax deduction.<\/p>\n

         <\/p>\n

        However, this is a tricky area of the law, so you may want to talk to an accountant<\/a> and a legal professional to see what your options are and if you\u2019re eligible to file it as a deduction before you go ahead and do so.<\/p>\n

         <\/p>\n

          \n
        1. Health insurance<\/strong><\/li>\n<\/ol>\n

           <\/p>\n

          As you will probably know if you\u2019ve ever been sick, medical expenses can be huge; life-changing huge, and expensive. So, it\u2019s good to know that the IRS acknowledges and respects this fact, some of the time at least.<\/p>\n

           <\/p>\n

          If you spend more than 7.5 percent of your gross annual income on medical expenses, including health insurance premiums, then you can claim as an itemized deduction on Schedule A of your personal tax return.<\/p>\n

           <\/p>\n

          If you happen to be self-employed, and you pay for your own health insurance, your allowed deduction may be higher. Speak with your accountant about including it as a deduction if you haven\u2019t already.<\/p>\n

           <\/p>\n

            \n
          1. Social Security Tax (for the self-employed)<\/strong><\/li>\n<\/ol>\n

             <\/p>\n

            If you\u2019re self-employed, you probably know that you must pay around 15.3 percent of your annual income towards Medicare and Social Security (FICA tax), but did you know that you are able to deduct the employee portion (7.65 percent) of the total? That\u2019s the equivalent of the employer contribution, and it is a very welcome deduction for anyone who works for themself.<\/p>\n

             <\/p>\n

            Tax laws change frequently, so consult with a CPA regarding any tax issue.<\/p>\n

             <\/p>\n

             <\/p>\n

            Go to Accounting Accidentally<\/a> for 400+ blog posts and 450+ You Tube videos on accounting and personal finance:<\/p>\n

             <\/p>\n

             <\/p>\n

            Good luck!<\/p>\n

            Ken Boyd<\/p>\n

            Author: Cost Accounting for Dummies<\/em>, Accounting All-In-One for Dummies, The CPA Exam for Dummies <\/em>and 1,001 Accounting Questions for Dummies <\/em><\/p>\n

            (email) ken@stltest.net<\/a><\/p>\n

            (website and blog) http:\/\/www.accountingaccidentally.com\/<\/a><\/p>\n

             <\/p>\n

             <\/p>\n","protected":false},"excerpt":{"rendered":"

            Most of us, whether running a business or filing taxes as an individual want to ensure that we are as efficient as possible at holding on to as much money as possible and reducing our tax burden as effectively as possible. 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