We’re all looking for tax saving tips. Most of us pay large amounts each year in taxes, and we need ways to reduce these expenses. There are many tax savings tips that can especially help families to reduce their taxes by looking for expenses that they might not have realized are tax deductible.
Child Care – One of the many tax saving tips for families is to be certain to include your child care expenses. There are a couple of ways to do this. The first is through a flexible spending account. With these employer sponsored accounts, you can contribute to your child care expenses on a pre-tax basis, reducing your taxable income for the year. The second way to reduce your taxes is to claim your child care expenses as a deduction at the end of the year. Day care expenses count, of course, but many parents don’t realize that those summer day camps that kids attend during summer vacation can be counted as well. As long as the primary reason your child attended a summer day camp was so that you could work or go to school, the fees you pay to these camps can be considered a deductible child care expense. The fact that the camp was fun and entertaining doesn’t eliminate it from being tax deductible.
Health Care – Another of the great tax saving tips for families is deducting health care expenses. Like child care expenses, health care expenses can be paid for on a pre-tax basis using a flexible spending account, or can be deducted at the end of the year. It’s important to keep track of all of your health care expenses, including purchasing over the counter medications, if you plan to deduct at the end of the year. If you’re using a flexible spending account, turn these expenses in for reimbursement.
Know the Code – Tax laws change from year to year. Each year there may be new and different deductions that your family can enjoy. Some may be one time deductions, while others may be new permanent changes to the tax codes. If you don’t have time to review the tax code for changes each year, consider have your taxes professionally prepared. Your tax preparer will be well informed on changes to the tax code, and can likely find tax saving tips and deductions you might miss.
Check with your financial planner or tax advisor to find more tax saving tips for your family. There are many ways that families can help save money on taxes each and every year, keeping more money in your pocket for taking care of your family.