Tax season is here and it’s time to gather your records together for your annual tax preparation and most importantly your deduction. Deduction is important for business owner or investor because you have the longest list of things that you can deduct and you want to have all records for that. You would not make a confident deduction if you don’t have records just in case you get audited. It’s a requirement for all businesses to have accounting records and you can make up your own if you own a very small business but records are still required and they’re the most important thing when it comes to confident tax return filing. There have been many people in the past including celebrities who evaded tax but they got penalized for it. You don’t want this to be a possibility for you. You want to do things legally when it comes to the IRS or any sort of government association because they do penalize you.
You can take out a standard deduction if your itemize deduction doesn’t add up to the standard deduction amount. You should familiarize yourself with all the possible deduction that a person or a business can qualified for. If you’re a student who took out a lot of loan, you can deduct some of these loans and you need to look into that. You can deduct some of the basic cost that almost everyone has and those are mortgage interest up to two homes, home equity debt, investment interest, healthcare cost and procedure not cover by your insurance, donation to charity, real estate taxes, student loans, investment loss, business expenses and equipment as well as loss, fraud, and all other noted specifically about any particular types of business.
You would have to look at your tax return package for more specific details about each type of business as each might have different deduction criteria. Businesses usually have the longest list when it comes to deduction because the government gives a lot of tax credit to entrepreneur who creates many jobs for other people and that’s why you get a long list of deduction. You would have to look at your tax carefully for that list. Accounting record will save the day. Your children and spouse tax credit would be on the list. Any state, city sales tax would be on the list. Independent contractors can deduct many things that are related to their work like travel cost, mileage, health cost, work supplies and uniform, and so forth. The most important thing is to look at the list on your own carefully when doing tax and have all of your records each year just in case you get audited.