The year of 2017 Anno Domini has come and gone. As we continue through the early part of 2018, many people are in the process of filing their taxes. One of the major differences between the rich and the poor is their understanding of taxes. Often times, the rich and financially literate find ways of putting thousands of dollars back into their own pockets whereas the financially illiterate give away money that is legally theirs to keep. As I consider this concept, two quotes flashed through my mind:
“If you think education is expensive, try ignorance”.
“My people perish for lack of knowledge”.
Knowledge really is power. Let us take a look at a few tax-deductible items that some are unaware of and others do not maximize.
- Post secondary education expenses
- Lifetime learning educational expenses
- Childcare expenses/Elderly Dependent expenses
- Charitable donations
- Casualty, Disaster, or Theft losses
- Business Expenses (car, phone, travel, meeting costs, etc)
- Medical/Dental Expenses (that exceed 7.5% of your gross income)
- New Job moving costs
- Job search expenses (interview travel)
- State/Local Sales tax (if it is more beneficial than state/local income tax where you live)
- Additional classroom material purchases (for teachers)
- Interest expenses (mortgage, student loan)
- Retirement Savings Credit
Here are some of the primary tax deductible categories used by many to lower their federal tax burden. Of-Course, the Internal Revenue Service (IRS) has specific requirements that must be met in order to qualify for some of these benefits. Qualification will depend on your specific situation. Be a clever African, investigate, and you could save yourself some of your hard earned money.
For anyone looking to do their own taxes this year, turbotax is offering “Absolute 0” which allows you to file for free. This offer is available to those who:
- Made less than $100,000
- Don’t own a home or rental property
- Didn’t sell investments
- Don’t own a business or have 1099-MISC income
- Don’t have any major medical expenses
This may be something for you to consider if you meet the above conditions. Unfortunately, this limited time offer does end on February 28th.
We encourage you to leave comments below on any thoughts relating to this post. If you have private suggestions or feedback, feel free to send us a message.
THE CLEVER AFRICAN: INVEST IN YOU