Tax Write-Offs, What You Need to Know
What can be written off on your taxes? And, is there a certain limit you have to hit before you can write things off?
Depending on your household size, and whether your filing married jointly or independently, there’s different levels. You can talk to an accountant and find out those exact numbers. It’s around $15,000, roughly.
Once you have more than that in write-offs, you get an itemization. Mortgage interest for most people is a really big one. Child care is a big one. Medical expenses. If something happened with your health and you’ve got excessive medical bills one year. Sales tax can be written off. There’s a lot of things. Investments in 401ks and IRAs get deducted. They’re not subject to those limitations. You get those regardless.
So, there’s a lot of different things. Tax planning becomes important as you make and more money, as your investments get more and more sophisticated. Certain investments are taxed at different rates because they’re capital gains versus ordinary income tax.
Our tax code is so complicated. If you’re just knocking down the W-2 job and pretty standard stuff, you’re fine to not sweat about this stuff. But, if you get into multiple streams of income; whether you selling stuff on Ebay, you have a side job, or you’re doing some contract work. Maybe you’re driving for Uber. These types of things complicate your tax returns, and now, the things you can write off are going to change. Your expenses are going to change, and the tax code can really be daunting.
At the end of the day, get a professional involved and make sure you’ve got the help you need.