| Someone once said, 'the best way to calculate your | | | | miscellaneous deductions. According to the IRS's most |
| taxes is...Honestly'. For 2005, add 'Smartly' to that and | | | | recent numbers, those filers who itemized back in |
| you'll get to keep more than you make. This April 15th | | | | 2002 deducted an average of $19,673 from their |
| is going to be the day of reckoning for every | | | | taxes |
| taxpayer. If you are smart enough with your | | | | 4. Go beyond the usual deductions: This year look |
| accounting and keep your eyes and ears open, this | | | | beyond the good ol' mortgage interest deduction to |
| could be your favorite day of the year. Take full | | | | save some more. Consider medical and dental |
| advantage of tax deductions due you and you can | | | | expenses, sales tax and personal property tax, |
| come back richer from the IRS office. | | | | education expense, damage cause by disaster or |
| As a home business owner who has been keeping | | | | theft and miscellaneous expenses. Miscellaneous |
| track of every dollar spent, you can make a killing on | | | | would include job search expenses, investment |
| your tax deductions with these smart taxpayer tips. | | | | expenses like brokerage fees, safety deposit boxes |
| | | | and subscriptions to investment publications. Also |
| 1. Jot it all down: keep a track of all your business | | | | included in miscellaneous is..Believe it or not... expenses |
| expenses. Maintaining timely and accurate records is | | | | of filing your taxes! This is still not over: add |
| something you'll thank yourself for, this April. You don't | | | | depreciation on your computer and cell phones used |
| necessarily need elaborate documentation to do this. | | | | for business purposes. |
| An easy and a very cost effective way would be to | | | | 5. Entertainment and meal expenses: no...this doesn't |
| keep all your expenses jotted down in a diary. It is a | | | | include lunch with friend to swap Christmas part ideas. |
| good idea to collect evidence as well (in case the IRS | | | | Establishing the business purpose of a meeting is |
| decides to do an audit later) like receipts, bills, and | | | | crucial for deducting expenses on entertaining. |
| statements for cheque payments etc. | | | | 6. Transport expenses: if you use your own car for |
| 2. Shop for your taxes: this financial year you will have | | | | getting about on business, you can claim deductions on |
| a choice to either deduct your state income tax or | | | | that too. Take care to religiously note down details like |
| your state sales tax. Do some math and compare the | | | | mileage, tolls, parking fees and maintenance costs. |
| two to see which tax deduction is higher. Major | | | | A good way of finding out what more you can use for |
| purchases in the last financial year should be | | | | maximising your deduction is to get tax preparation |
| crosschecked to see in which category they yield a | | | | software. |
| larger deduction. | | | | A word of caution here: keep 'creative deductions' like |
| 3. Itemize your deductions: Before you decide to settle | | | | kid's allowance, silicone implant etc. out of the picture. It |
| down for standard deductions ($4,850 for singles and | | | | is rather difficult to outrun the IRS, as they have three |
| $9700 for married couples filing jointly), fill out Schedule | | | | years to decide they want to verify your records and |
| A to see if your itemized deductions are larger than | | | | can drop in for a surprise audit. |
| the standard deductions. You might be in for a surprise. | | | | Maximise your tax deductions in 2005 with these tips |
| Consider itemized deductions in areas like: Home | | | | and see all the cash flow back in into your business. |
| ownership, charitable donations, Medical expenses and | | | | |