What Medical Expenses Are Tax Deductible?

If you determine that you spent over 10 percent of your adjusted gross income (If you are over 65, the amount is 7.5 percent) on medical expense in 2014, you can potentially claim these expenses as a tax deduction. If you are using TurboTax 2014 to file your taxes, the TurboTax software will help you to figure out your medical expenses as it can potentially be a significant amount.

Deductible medical expenses include those of any dependent, as well as those of you and your spouse.

Expenses for medical costs are not deductible if you get reimbursed for them in some way; for example, your company pays you back for the cost of medical treatment. If your insurance company covers some of the cost and you cover some, the part that you pay is deductible.

If you charged your medical expenses to your credit card, you can deduct those charges, but keep in mind that the year in which you charged them is the criteria.

Using TurboTax will help you to accurately determine the type of medical expenses that qualify for a deduction, and these include doctor and dentist visits, as well as X-rays and other preventative treatments or procedures. Procedures such as teeth whitening, and most types of cosmetic surgery do not qualify for a deduction, unless an accident or disease necessitated the cosmetic surgery.

Prescription drugs and insulin are eligible for medical expenses deductions, as are the costs of visits to a psychiatrist or psychologist, alcohol or drug related treatment or rehabilitation, and the cost of sending a disabled person to a special school. Over the counter supplies and equipment are deductible, but not over the counter drugs and medication.

There are various other deductible medical expenses, and TurboTax 2014 will alert you to these, which include the cost of laser surgery, contact lenses, dentures, crutches and a wheelchair. Lactation expenses, participating in a stop smoking program, treating sexual dysfunction, removing lead paint and the cost of a nursing home are all eligible too.

If you are enrolled voluntarily in Medicare A, the amount paid out of pocket by you is eligible, as well as premiums for Medicare B. TurboTax will inform you that the premiums for an insurance plan sponsored by your employer are not deductible, although the premiums for long term care insurance are eligible.

TurboTax will help you to understand all of these possible deductions – you don’t have to be an expert when using TurboTax 2014!

Charitable Summer Giving Equals Tax Deductions

During the leisure-driven summer season, people should still want to increase their charitable giving. Not only is this a noble enterprise, but it also benefits the taxpayer during tax season. There are many avenues of giving that can earn a tax deduction for the average person.

For instance, children’s summer camps provide fun and safe day care to many needy kids. They rely on donations to help parents with summer time care while parents are working and the kids are not in school. Another good avenue is finding a community fan and air conditioning drive which helps families and the elderly avoid heat-related illnesses during the sweltering summer months.

The national debt clock outside the IRS office...
The national debt clock outside the IRS office in NYC. (Photo credit: Wikipedia)

Or, finish your spring cleaning in the summer. Donate the clothing, household goods and other items no longer needed to not for profits who refurbish and resell them in their thrift stores.

Here is a caution, however. While charitable giving is important and worthwhile, be sure to check that the organization is legitimately not for profit. Check its references online. Ask friends and relatives what they know about it. Call the organization to inquire about its tax exempt status. Don’t donate unless you know all the proper paperwork is in the hands of the Internal Revenue Service.

To further credential your charitable giving this summer, be sure to save the receipts the not for profit provides with a donation. Use online tax software such as Turbo Tax to keep your donation records in good order. Turbo Tax Its Deductible records everything necessary to give correct documentation to the IRS come tax season.

Remember, no matter how you spend your leisurely summer days, plan to send some money, time and belongings to the charitable organization of your choice. Correctly recorded and documented, those donations will add up to nice tax deductions in April.

Turbo Tax And Mortgage Tax Deductions

Turbo Tax 2014 and Mortgage Tax Deductions

Many homeowners feel that it is more beneficial to claim a mortgage tax deduction than to pay off their mortgage. However, they really need to consider whether it is more beneficial to build up their savings or to pay off the mortgage debt completely.

English: mortgages Green Bay, WI
English: mortgages Green Bay, WI (Photo credit: Wikipedia)

First, a homeowner needs to look carefully at all the items on the return. You need to know that a tax credit is not the same as a deduction. Deductions decrease the taxes you are obligated to pay; while tax credits reduce your taxable income. If you do not have a mortgage, you may pay more taxes; however, the taxes you pay may be lower than the annual interest you pay on your mortgage. It is not good long term planning to keep a mortgage on your home for a tax break.

What you need to be careful with is using your savings to pay off your mortgage in this uncertain economy. Look carefully at your job security, health and what would happen if you lost your job. You never know when you will need to utilize your emergency funds. If you pay off your mortgage, you might have to sell the house or borrow against it if your emergency funds are depleted. Ensure that you are saving for retirement and maintaining an emergency fund before considering paying off your mortgage.

Tax Tips By Consumer Reports On Lowering Your Expenses

Tax Tips By Consumer Reports

Filing of federal income tax returns by businesses and employers can be somewhat difficult. Many people end up paying higher taxes than necessary because of a lack of proper knowledge on how to reduce their taxes during the preparation of the returns. Consumer reports have created a list of tips on how to reduce your personal tax burden. It is critical for businesses to report their tax numbers on a quarterly basis as many have found out after starting a small shop. This helps you to avoid fines when reporting your complete tax returns at year-end.

Taking advantage of tax credits offered by the IRS standards. It is good to know that businesses can be take a specified tax credit limits. Therefore, a business can enjoy this provision, which relieves the business off the burden. This enables you to plan for your future tax returns.

If you are unable to use your credits, you are allowed to carry forward or back. This means that you still have a room for easing your tax problems.

Consumer Reports
Consumer Reports (Photo credit: Wikipedia)

Taking health plans for your employees

Employers and businesses are allowed to access tax deductions as provided by the tax laws. Health plans provided by the employer is subject to deductions, and so it is essential to offer them the best health plans that they qualify for. If you are not an employer, it is good to know that your own contributions, contributions of your spouse and dependants. The understanding behind this tip is that you are allowed to have 100% deductions.

Take charge of your depreciation

According to consumer reports, 2013 taxes laws laws allow businesses to take advantage of the tax deductions on the property and equipment. The provisions allow businesses to enjoy deductions instead of expenses. This means that instead of retaining old assets that result in depreciation as an expense, businesses can purchase new assets to enjoy these benefits.

4 Ways to Save on Your Taxes

As we kick off the new financial year, small businesses and enterprises should already be thinking about how to plan their business in order to minimize their tax liability. For many business owners, taxes are a major source of stress and worry, so by starting to plan your tax strategy early in the year, you can ensure that your year end goes smoothly later on. Here are some of the best ways in which you can minimize your tax liability for this financial year.

1. Make employee reimbursements accountable

If you include reimbursements for things like travel, entertainment and sustenance in an accountable format, these will not be treated as additional compensation. This means you can reduce your employment tax liability and your employees will be happy too, because they will not have income included on their own tax forms for the reimbursements they receive. As well as the usual expenses, you can consider including things like employee uniforms, tools and other incidental items.

2. Keep all receipts relating to your car

If you run a car, van or truck for business purposes, you can use the fixed mileage allowance set by the tax authorities to calculate the available write off figure for your use of the car. However, the option to this is that you can offset things like fuel, repairs and maintenance of the vehicle but exclude the mileage calculation. By keeping all your receipts and invoices for money spent on the car, you will be able to make an assessment at the end of the tax year as to which route works best for you. Whichever way you decide to go, you will need well documented records of driving usage including odometer readings and dates, so keep a good record throughout the year to help with end of year calculations. In addition to this deduction, you can deduct payments for parking fees and any toll charges from your taxes, as long as you have kept all the receipts and proof of payment.

3. Employ your kids

If you have children who help out with the business, put them on the payroll. Kids over 16 have a tax free allowance equivalent to that of an adult, and the money you pay them is a tax deductible business expense. As well as benefiting your company financially you will also be able to get work done that needs doing, whilst teaching your children the value of hard work and responsibility.

4. Change your accounting and business type to suit your needs

There are a number of different ways in which companies can account for their businesses. Sole traders may be better off as limited companies, companies that manufacture goods may be able to change the way they account their inventory and small businesses need to consider whether their staff are better off as freelancers, PAYE employees or on short term self employed contracts. To get the inside track on what will work best for your business, it’s a good idea to enlist the support of an accounting professional who will already have a good understanding of tax rules and how businesses can benefit.

PHS Hadjizacharias can provide you with professional Tax services in Cyprus. Its an independent organization with global experience in Audit in International Tax planning