2023 Tax Deduction Cheat Sheet. Save money!

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Hey there! Are you ready to start saving money on your taxes? Of course, you are! Nobody likes paying more than they have to, and if you're like most people, you probably don't know all the deductions available to you.

But don't worry, that's why I'm here to help you out. In this article, I'll show you some of the most common tax deductions you can claim and how to maximize your savings.

First of all, let's clarify what a tax deduction is. It's an expense you've incurred throughout the year that can be subtracted from your income, ultimately lowering the amount of tax you owe.

What can I write off on taxes?

Home Office

If you work from home, you're in luck! You can deduct expenses related to your home office.

That means you can write off things like rent, utilities, and even a portion of your mortgage interest. Pretty sweet, huh?

Just remember, the space you're using as your office must be used only for business purposes.

So, no sneaking in some Netflix binges or naps on the clock!

Office Supplies

Oh, office supplies...they always seem to disappear so quickly, don't they?q But here's some good news - you can write them off on your taxes!

Yup, that means all those pens, paper, staplers, and even bigger ticket items like software, printers, and other office equipment can count as deductions.

So go ahead, and stock up on all those goodies you need to keep your business running smoothly!

Travel Expenses

If you've been hitting the road for business, you know it can get pricey. But don't worry, because you can include those expenses when you file your taxes online! That means your lodging, transportation, meals, and even tips can all count as write-offs. Pretty sweet, right?

But wait, there's a catch. To make sure those deductions are valid, the expenses have to be considered "necessary and ordinary." That means you can deduct the cost of your hotel room, but not that overpriced bottle of wine you ordered at dinner. Sorry, winos!

And here's another thing to keep in mind - your business trip has to include at least one overnight stay, and it can't be in your "tax home." That just means you'll need to be at least 100 miles away from where you normally do business for any expenses to be deductible.

So, if you're hitting the road for work, make sure to keep track of all your receipts and expenses. And don't be afraid to claim those deductions - every little bit counts!

Phone & Internet

Did you know that you can write off part of your phone and internet bills on your taxes if you use them for work? That's right - those pesky monthly bills can work in your favor when it's time to file your taxes online.

But here's the thing - you'll need to keep track of how much time you spend using your phone and internet for business purposes. That means if you spend an hour on the phone with a client, or three hours working on a project using your internet, make sure to log it. This will help you determine how much you can deduct from your taxes.

So, whether you're scrolling through emails on your phone or researching a project on your laptop, remember to keep track of your time and usage. That way, you can take advantage of those sweet deductions and save some money come tax season!

Business Meals

Treating your clients or colleagues to lunch or dinner could save you some money on your taxes! When you pay for a meal that's directly related to your business, you can deduct 50% of the cost.

But before you go splurging on expensive meals, keep in mind that there are some rules to follow. First, make sure the meal is a legitimate business expense. This means you're discussing work-related matters, and not just catching up with an old friend. Also, you need to keep those receipts, so don't throw them away!

Next time you're taking someone out to eat, think of it as an investment in your business. Not only are you building relationships, but you could also be saving some cash on your taxes. So, go ahead and enjoy that steak dinner, just remember to keep those receipts!

Business Startup Costs

If you've just started your own business, there's some good news for you. You can deduct up to $5,000 in startup costs on your taxes.

These costs include things like legal and accounting fees, marketing expenses, and even training courses to help get your business up and running. So, if you've spent money on any of these things, make sure to keep track of those receipts!

Starting a business can be costly, but this deduction can help ease the financial burden a bit.

Bad Debt

If you've ever had a client or customer who didn't pay you for goods or services you provided, you may be able to write off that amount as bad debt on your taxes.

This can be a frustrating situation to deal with, but the good news is that you may be able to recoup some of your losses come tax time. Just make sure to keep thorough records of your attempts to collect the debt, as this will be important when claiming the deduction.

Remember, running a business isn't always smooth sailing, but taking advantage of all the tax deductions available to you can help make things a bit easier. So, don't forget to keep track of those bad debts and consult with a tax professional if you need help navigating the process.

Self-Employment Tax

If you're self-employed, you're probably aware that you have to pay self-employment tax. However, you may not know that you can deduct half of it from your taxes!

That's right, you can reduce the amount of self-employment tax you owe by deducting half of it from your taxable income. It's a nice little perk for those of us who are our own bosses, so make sure you take advantage of it when you file your taxes.

Just remember to keep accurate records of your income and expenses, as well as your self-employment tax payments, so you can claim the deduction accurately. And if you're unsure about anything, don't hesitate to reach out to a tax professional for guidance.

Legal & Professional Fees

Guess what? If you hire an accountant, lawyer, or other professional to help you with your business, you can write off their fees on your taxes!

This is great news for small business owners who need a little extra help managing their finances or navigating legal issues.

Just be sure to keep all of your receipts and records, so you can prove that the expenses were related to your business.

Automobile Expenses

Are you using your car for your business? That's awesome! Did you know that you can save some money on your taxes by deducting expenses related to your car?

This includes gas, repairs, and even insurance! It's important to keep track of your mileage, so make sure you keep a detailed log.

That way, you can be sure to get the most out of your tax deductions!

Medical Expenses

If you have high medical bills, you may be able to get a tax break. That's right! You can write off these expenses on your taxes too.

However, there's a catch. The total medical expenses you want to deduct must exceed a certain percentage of your income.

But if you meet that requirement, go ahead and claim those deductions.

Bank Fees & Interest

If you have a business and pay fees or interest on loans or bank accounts, I've got some good news for you! You can deduct these expenses from your taxes. That's right, you can save some money by deducting these costs from your taxable income.

Just make sure you keep track of all the fees and interest you pay on your business accounts and loans. That way, when it's time to file your taxes, you'll have all the information you need to claim this deduction.

So, if you're looking for a way to save some money on your taxes, don't forget to take advantage of this deduction. It's a great way to keep more of your hard-earned money in your pocket!

Advertising and Promotions

Here’s a cool tax tip for your business. If you've spent money on advertising or promotions to get your business out there, you can write off those expenses on your taxes!

That's right, any costs associated with promoting your business can be deducted, so be sure to keep track of all those marketing expenses.

Whether it's social media ads, flyers, or business cards, make sure to save those receipts!

Retirement Plan Deductions

If you're contributing to a retirement plan, such as a 401(k) or IRA, you can deduct those contributions from your taxes!

That means you get to save some money while also planning for your future. It's a win-win situation.

So, make sure to keep track of those contributions and use them to your advantage come tax time.

Business Entertainment

You can deduct some of your entertainment expenses from your taxes if they are related to your business! So, if you take your clients or colleagues out for a round of golf or a show, you can write off those expenses.

Just make sure to keep track of them and make sure they are directly related to your business.

Charitable Deductions

Here's some friendly advice: if you donated to a charity, you can write off those donations on your taxes! It's a great way to give back and save money at the same time.

Just remember to keep a receipt or other proof of the donation so you can claim it on your taxes. And make sure the charity you donated to is qualified, so you can get the deduction you deserve.

Happy giving!

Child Care Credit

If you've paid for child care so that you can focus on your work, you might be eligible for a tax credit! Yes, that's right. You can get some of that hard-earned money back. So, make sure to keep all the receipts and records of the payments you made for childcare expenses.

The credit amount will depend on your income and how much you spent on child care, but it's worth looking into.

Don't miss out on this awesome opportunity to get some money back in your pocket!

Adoption Credit

If you adopted a child, you might be eligible for a tax credit. The government wants to support adoption and make it easier for parents to bring children into their loving homes.

So, if you adopted a child in the past year, be sure to check with your tax preparer to see if you qualify for this credit. It could save you some serious dough on your taxes.

Business Insurance

If you have business-related insurance, you can write off the premiums on your taxes. This is great news if you have liability insurance, professional liability insurance, or property insurance for your business.

Education Expenses

Hey there! Here's some friendly advice for all you business owners out there. If you attended a conference or took a course that was directly related to your business, you can deduct those expenses from your taxes.

It's a win-win situation - you get to learn something new and improve your business while also potentially saving some money on your taxes.

What if I'm missing or lost receipts?

Now that you know what deductions you can claim, what if you're missing receipts? Don't worry, you can still claim deductions without a receipt.

Just make sure to keep a detailed log of the expense, including the date, amount, and purpose. It's always better to have a receipt, but a log can help support your claim in case of an audit.

Bonus! Here are 10 tax mistakes to avoid:

Forgetting to file your taxes on time can result in penalties and interest charges. It's important to keep track of the tax deadlines and file your taxes on time to avoid unnecessary fees.

Not keeping track of receipts and expenses can make it difficult to accurately report your income and deductions. Keep detailed records of all expenses related to your business or employment to make the tax filing process easier.

Failing to report all income, including side hustles and freelance work, can result in penalties and interest charges. Be sure to report all income, no matter how small, to avoid issues with the IRS.

Claiming false deductions is considered tax fraud and can result in severe penalties and even criminal charges. Be sure to only claim deductions that are legitimate and directly related to your business or employment.

Filing the wrong form can lead to errors and delays in processing your tax return. Double-check to make sure you're filing the correct form for your situation.

Not reporting rental income can result in penalties and interest charges. If you earn rental income, make sure to report it on your tax return.

Forgetting to report foreign accounts or assets can result in penalties and fines. If you have foreign accounts or assets, make sure to report them on your tax return to avoid issues with the IRS.

Failing to report cryptocurrency transactions is a common mistake that can result in penalties and fines. If you've bought or sold cryptocurrency, make sure to report it on your tax return.

Filing without reviewing for errors can lead to mistakes on your tax return. Take the time to review your tax return before filing to avoid errors and potential issues with the IRS.

Not seeking professional help if needed can result in errors and missed opportunities for deductions. If you're unsure about how to file your taxes or have a complicated tax situation, consider seeking professional help from a tax preparer or accountant.

The bottom line is that tax deductions can help you save a lot of money on your taxes, so make sure to take advantage of them. Keep track of all your expenses and consult with a tax professional if you're not sure about what you can claim. Happy tax season! P.S. Just remember, if you ever get audited by the IRS, don't panic. Just bring a box of donuts to your audit and tell them you thought they could use a little "dough" on top of their taxes 😅

It may not work, but hey, it's worth a shot!

2023 Tax deduction cheat sheet. Save the most out of your taxes