A tax deduction possible with a moving or relocation company in austin! We’re here to help!
Regardless of how much money you may have coming in, taxes are something that can be a real burden at times. If you’re someone who’s trying to find a way to lower your taxes this year, there are a few different methods that you can make note of in order to help make that very thing happen.
Make a Contribution to a Retirement Plan
Take a moment to think about being able to not include approximately $18,000 of your own money on your taxes. You can max out your 401(k) and be able to do that very thing. Currently, workers under the age of 50 are allowed to put up to $18,000 of pre-tax money into a 401(k). On the other hand, workers over the age of 50 can do the same thing with $24,000. If you don’t have access to a 401(k), however, you can instead fund an IRA, but you’ll obtain a much smaller benefit. For instance, workers under the age of 50 can contribute $5,500, while workers over the age of 50 can contribute $6,500. The more money you put in, the more of a tax break you’ll be able to get.
Use Pre-Tax Money to Pay for Healthcare and Commuting Costs
These are expenses that are certainly unavoidable for a lot of us; however, if you use pre-tax money to pay for these, you will be able to take advantage of some great tax savings at the same time. Those who are currently working can contribute up to $2,600 per year to an FSA; however, be careful not to overfund it. This is because once that money gets there, you will need to either use it or forfeit your entire balance. Additionally, if you register for commuter benefits through your employer, you will be able to use up to $255 pre-tax dollars every month to help pay for transit expenses, as well as that same amount to help pay for parking. You can also choose to double-up on these benefits as well if you wish to do so.
Obtain a Break for Child Care
On average, a typical family spends over $10,000 every year on daycare for their children for a full-time basis. At the same time, a household that employs a full-time nanny generally spends nearly three times that amount. However, there are certain tax breaks that are available for individuals who pay for child care. For instance, if you register for a dependent care FSA, you will be able to save up to $5,000 per year in pre-tax dollars to help pay for costs associated with child care. Furthermore, if you meet eligibility requirements, you will be able to claim the Child and Dependent Care Credit, which will give you a dollar-for-dollar reduction of your overall tax liability. This credit will provide lower earners with up to $2,100 in tax benefits, with higher earners being provided up to $1,200.
Know Your Deductions
Owning a home is something that can be expensive; however, it can also save you thousands of dollars in terms of your tax bill. There are many homeowners who seem to benefit the most from the mortgage interest deduction. This is a deduction that enables you to write off the interest portion of all of your home loan payments; however, you cannot have borrowed more than $500,000 as a single filer or $1 million as a jointly-filing couple. Additionally, you can also deduct points on your mortgage and property taxes as well, as well as deducting your monthly premiums as long as you don’t earn too much money in the event that you find yourself paying PMI by not having put 20{c90871bae1ccbef2c97f03962533da1d1cdb56d95578a7d78109bc048c24bb44} down on your home.
Make Your Move
If you’ve thought about moving, this could be the year to do it. It could help to lower your tax bill, especially if you move in conjunction with obtaining a new job. If the total distance between your old home and your new home is approximately 50 miles more than your old commute, and if you also work at that job around 39 out of 52 weeks per year after your move, then you will be able to deduct any and all costs associated with the move itself.
