February has arrived and you are starting to get more concerned about working on your taxes, right? Unless you are absolutely sure that you don’t have to pay your taxes or that someone else is doing all the dirty work, you should begin to work on some aspects of your tax preparation. One of the less difficult ways, which will still make you feel as if you have accomplished a great deal, is to document what deductions you can make based on your spending and activities last year.
Do you keep a diary? I do for many reasons, and tax prep is one of the biggest. If you have a diary, go through it and find every day you went to a museum. Did you also write the amount you paid for admission fees, and how many members of your family who went? That can be used for deductions. If you don’t have the amounts written in your diary, refer to the museum’s website for the admission fees. If it was a pay-as-you-wish institution, try to remember what you paid (within reason). For instance the American Museum of Natural History in Manhattan has that policy.
Mind you, if you did not keep a diary in 2014 or did not keep such detailed accounts, this may inspire to go buy a diary now, or keep more detailed records for the future! In addition, if you paid for memberships to any museums or non-profit performance groups, you can use these as deductions. If you have specific questions regarding them, phone up the organizations.
Speaking of detailed record keeping, did you donate money or goods to any charitable groups this past year? Perhaps you documented this in your diary as well. If you paid by check or credit card for any charitable causes, you can comb through your bank statements, check books, and credit card statements (paper or online) for deductions. Many charities also send paper or email receipts for that, and hopefully you held onto them. In fact, go through your emails through the year and see if there are any emailed charitable receipts. Perhaps you even put a star beside these, to help yourself later on.
Did you donate goods? Perhaps old clothing to the Salvation Army or food to a local food pantry? Books to a nearby library? Hopefully you got (and retained) a receipt for this. If not, try your best to remember what you donated, write it down, and then you can use this information to figure out the value of the goods donated. There are IRS lists you can refer to, and if you use tax preparation software, this will be included.
Side note: if you find that you have not been good and thorough about keeping these types of records and receipts, please resolve to do so this?year of 2015. Put the receipts you get this time around in a designated large folder or envelope, write “TAX STUFF” in bright letters on the front, and use it wisely!
Take a look at online articles and listicles about tax deductions. Get ideas from them, that could help you figure out more deductions you can claim. Kiplinger has many good articles, as does the Motley Fool, Bankrate, and others. These are good sources for ideas. For instance, they suggest deducting job-hunting costs: did you spend money on travel for job interviews? Buy nice stationery for the resum?s? Did you take a course to beef up your on-the-job skills and pay out of pocket? You might be able to use the Lifetime Learning Credit. If you have money invested in a mutual fund or stock, and had dividends reinvested, you can deduct portions of that.
There are many, many deductions that one can take and it may seem rather nit-picky to find them all. But doing this work can save you some money or perhaps a lot of money.