Tag Archives: tax write-offs

Tax Preparation

Writing Medical Bills Off Next Year’s Taxes

It’s never too early to start looking at expenses that can be written off taxes, and this time around we’re going to look at medical expenses.

One reason medical expenses might be a bit different this year is because of implementation of the Affordable Care Act. While there has been no official notification of changes to last year’s policy, it’s possible that more people will have the ability to write off something this year.

The policy last year was that in order to write off anything on taxes regarding medical expenses you had to have paid at least 10% of your income. This meant that if you earned $50,000 for the year you had to have spent at least $5,000 to get any benefit.

This year, since more people have purchased insurance via government exchanges, more people are probably going to get close to that threshold, if not surpass it, especially if they didn’t qualify or accept any government adjustments. Since most plans across the country started around $425, this means many people will have paid at least $5,100 in premiums alone. Add to that anything paid out of pocket towards medical bills and there could be significant adjustments allowed this year.

That’s if last year’s 10% holds, and right now it seems to still be out there, although it’s possible there could be an adjustment. It’s doubtful the adjustment would go up, so if the percentage amount goes down even more people would qualify for a tax benefit.

Also, if you’re self employed you get to write off health premiums as a business expense, which is a greater benefit even if you paid it out of your personal bank account.

By the way, medical expenses cover a few things you might not have thought of such as long term care insurance premiums, hearing aids, glasses, contact lenses and solutions, costs for prescription drugs and even band-aids. This means you should keep receipts for almost everything you spend, including dental bills. If you want more information on the types of things you might be able to write off, click here.
 

Tax Preparation

5 More Things You Can Write Off On Your Taxes

We’ve had two other articles here on expenses you can deduct from your taxes if you’re a business. The first was titled 5 Items You Can Deduct From Your Taxes. The second was called Trip Expenses You Can Deduct For Your Business.

We could go on and on but we like spacing things out some; after all, we don’t want to overwhelm anyone all at once. With that, here are 5 more things you can write off that we haven’t covered yet.

1. Education. If you need continual education to keep a certification, or if you need to go to any types of classes where you’re learning something you can apply to your business, you can deduct those expenses. This includes joining networking groups because often many of them have educational programs you can partake of.

2. Costs of goods sold. Anything you have to buy to create something for a client, to ship something to a client, or in representing your client in any way that the client doesn’t immediately reimburse you back for you can write off. For instance, the client might reimburse you for sales portfolios you create but you might feel silly billing them for the paper or copying charges. If you don’t bill that to them, but if you do you can write things like that off.

3. Services you hire that help you concentrate on your business. If you hire an accountant you can write that off. If you pay for internet services for your business you can write that off. If you want the landscape around your office to look good you can write that off. Even maid services if you work from home can be written off in some fashion. Of course it’s best to talk to an accountant to find out what percentage of it you can take for some of these and other things.

4. Advertising. Anything you spend on advertising, whether you pay someone else to do it or you do it yourself, is allowable. Of course if you’re advertising on Twitter and handling it yourself you can’t write that off, but if you’re paying for a service that sends out occasional tweets promoting your business you get to write that off.

5. Clothing. Of course this one is within reason, but there are clothing items you can write off if they’re part of your business. For instance, lawyers can write off suits and shoes. Plumbers can write off the costs of their uniforms. If you’re on the road and you need to buy new clothes because your baggage got lost and you can’t get reimbursed by anyone, you can write that off, although the airlines might pay you back for some of that. However, if you’re trying to write off a $500 pair of sunglasses… you’ll want to talk to your accountant about that.