self employment and taxes - what do you do?

Posted on: 7 July 2015

Taxes. They're one of the only things in life that are certain. While nobody really enjoys the process of filing taxes (except maybe the people who are paid to do it), learning about and taking advantage of the deductions available to you can make the end result a little better. Many people often--and unknowingly--pay much more than they need to. When you begin your tax preparation, take some time to get informed, and make the process a little better by knowing you're getting everything you deserve. Listed below are three surprising tax deductions that you should know about:

1. Out-of-Pocket Charitable Contributions

All the little expenses from charity work add up over the year. If you purchased ingredients when you made meals to serve at a soup kitchen or paid to print flyers for a school fundraiser, you can get that money back. Sometimes, because these expenses are small, people forget about them until tax time rolls around, and by that time, they can't remember how much they paid or what exactly they were contributing to; save your receipts and save yourself a lot of trouble later. 

Remember: It's great to be able to deduct charitable contributions, but if your contribution to a single charity is greater than $250, you will need that charity to acknowledge and verify the work you did. 

2. Weight Loss

This deduction can be a bit tricky, as your weight loss must be medically justified. This means that you can't get a tax deduction because you wanted to lose weight to fit into your bathing suit; however, if your physician recommended weight loss procedures for a specific health condition (obesity, hypertension, etc.), you can deduct your weight loss expenses.

3.  Job-Hunting Costs

While it is frustrating to have to look for a new job, you can deduct some of the related expenses, including employment agency fees, resume services, and travel expenses. These expenses add up, so make sure that you save your receipts and deduct those costs.

Remember: There are some limits to the deductions you can make from job-hunting costs: you must be looking for a job in the same field as your previous job, for example, and this law does not apply to recent graduates. 

Every year, millions of people miss out on money because they are unaware of possible tax deductions. When preparing your taxes this year, keep the three deductions listed above in mind, and get back some of what you spent. For more information, contact Jeff Baker & Associates, PS or a similar firm.