financial bookkeeping tips for contractors

Don't Overlook These Tax Deductions

Preparing your income taxes is a yearly task that must be completed. Many people dread tax season because they are worried they will owe the government a large sum of money. Deductions can be used to help reduce your tax burden, but taxpayers leave a lot of deductions unclaimed each year.

Don't overlook these important deductions if you want to minimize the amount of money you owe or maximize your tax return this year.

1. Charitable Contributions

Most people know that major monetary gifts to charitable organizations can be deducted when filing income taxes. What you might not realize is that even smaller contributions can be deducted to help you reduce your tax burden.

You can deduct any ingredients that you use to prepare meals for the needy. If you drive your personal vehicle while performing charitable work (like giving rides to the elderly or delivering meals to the sick) you can also deduct your mileage as part of your charitable contributions.

Be sure to keep receipts and provide your accountant with all the information needed to claim the full amount of your charitable contributions.

2. Student Loan Interest

The government allows any interest that is paid on student loans to be claimed as a deduction. Many students know that they can claim the deduction when repaying student loans themselves, but you may be surprised to discover that you can also deduct interest that has been paid by your parents or another third party.

The IRS treats student loan interest payments made by a third party as gifts to the student. As long as your parents are not claiming you as a dependent, you can deduct the student loan interest payments they made on your behalf when filing your own income taxes.

3. Job-Hunting Expenses

Finding the perfect job is a real challenge. The search can take time and a lot of resources. Did you know that you can claim certain expenses associated with looking for a new job as deductions when filing your income taxes?

If you searched for a new job, calculate the mileage you traveled and the cost of any plane tickets you purchased. Food, cab fares, and fees paid to an employment agency can also be claimed as deductions. Don't miss out on valuable savings because you fail to deduct the expenses associated with searching for a new job when you are filing your income taxes in the future. Contact a service, like Hough & Co CPA , for more help.

About Me

financial bookkeeping tips for contractors

As a renovation contractor, I have a lot of things to worry about each day. I have to think about my customers, my business, the insurance I need and even the employees that I have working for me. All of these things keep me busy enough without having to worry about keeping up with my financial bookkeeping each day. How do you keep up with the financial bookkeeping so that you don't make any errors that could cost you a whole lot of money? I have worked with my accountant to develop a process that has helped me and I have shared the tips he has taught me right here on my blog to help you.


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