Tax deduction is the amount of income that you pay from your yearly income which is based upon your taxable income. Usually your income defines what tax you are going to pay. If you decrease your income than you also decrease your tax but i am sure that nobody wants to decrease their income. Everyone wants to increase their income and want to pay minimum tax.
Basic Idea Behind Tax Deduction
Tax deductions do not directly reduce taxes but yes it reduces taxable income. You can reduce what you have to pay by adding deduction to your tax return. Everyone prepare their tax return to know what they are going to pay and how much they can reduce by adding deduction in it. This why everyone spend so much of time in preparing tax return. Hire Ed Lloyd & Associates, PLLC to prepare your Tax in proper order and you utilize your time in productive work.
How Much Deduction You Can Avail?
There is one deduction under the internal revenue code which is availed by everyone. Everyone is entertained by tax deduction no matter what their income. $5000 is standard deduction and you can deduct it automatically on your 1040. If you are senior citizen that is above the age of 65 than you can qualify for higher deduction.
If you married than you qualify for double tax deduction and having any dependent such as children than you can claim for their tax deduction on your tax return.
How to Increase Tax Deductions?
Most of it requires cash expenditure and increasing actual expanses to increase tax deduction but this is not that desirable way. Real estate depreciation is a source of tax deduction by just separating their land from the improvements. Owner can claim for the tax deduction for the property that he owned for more than 1 year by catching up previously under reported depreciation. Another source is looking for the cash expenditures that id being capitalized. Claim for tax deduction of the items that were capitalized in past year.
Child labour can be good source of tax deduction if they are your children than you can claim for Tax Deduction because this can generate addition tax deduction $5000 per child.
Business vacations can be an option to make expenditure deductibility. Simply just plan a vacation for meeting or seminar. Your expenditure like airfare and hotel charge will be deductible and even half of the meal around the business will be deductible. But hotel fare before or after meeting or your spouse’s fare will not be deductible. Ed Lloyd CPA has many other ways and Strategic planning that will help you in increasing your Tax deductions.
If you look around your small personal business expenditure like printer, computer, association’s dues and business publication can be deductible. Even your business phone calls can be deductible.
Federal Tax Deductions
Federal tax deductions are implemented to benefits the common man. If an individual is wishing to take advantage of federal tax deduction than he/she may choose from standard tax deduction or itemized deductions. The itemized deductions that you avail on expenses such as household utilities, vehicles, computers, education expenses, medical and nursing care expenses. The charitable contribution can help you in availing more federal deductions.
Everyone takes out time to prepare their Tax Return and documentation work so we Ed Lloyd & Associates providing full services like Accounting, Bookkeeping Services, Tax Preparation and Tax Projection, helping your business to achieve success by sharing our knowledge with you and Strategic Tax Planning that will reduce your tax and maximize your Tax Refund. Ed Lloyd CPA and tax specialist also manage your business or personal account on digital dashboard i.e. cloud based which you can access anywhere you want to.
Contact us today:
Ed Lloyd & Associates, PLLC
8045 Corporate Center Drive, Suite 100
Charlotte, NC 28226