Everyone loves an income tax return, but emotions are usually than less enthusiastic when it comes to tax preparation. Fortunately, if you experienced any significant life changes last year, then this is the year to get excited as you could end up with a larger tax return. The team at Essential Accounting & Tax Services, located in Kalispell, MT, wants to make sure you’re aware of the tax deductions and credits that may be available to you, so they’ve compiled a helpful list.
Here are few common major life events and the deductions associated with each:
- Started a Business: Starting a business is an exciting, liberating and a terrifying experience. Whether you’re focusing on your own business full time or currently only building its clientele on evenings and weekends, you qualify for multiple tax deductions. Things like internet service, new computers, telephone service and vehicle use for business related activities can be at least partially deducted from the taxes you owe. When running a business, be sure all of your accounting and tax information is set up beforehand by a business accounting expert to prevent difficulties at tax time.
- Purchased a Home: Purchasing a new home allows for multiple tax deductions. For instance, the interest you’ve paid on your mortgage over the past year is deductible. You can also receive partial or full deductions on certain home improvements, especially if it is considered an eco-friendly or green update like solar panels.
- Expanded Your Family: Welcoming a child into your family is a wonderful experience, and it can also provide some financial relief when it comes to tax returns. A child increases your number of household dependents. Thus, you save as a result of the personal deduction for that child. As for your tax return, the federal government provides a yearly tax credit which is currently set at $1000. Deductions are also available for childcare expenses.
Tax laws change frequently, so be sure keep track of these events in the future to ease your tax preparation process along. For all of these events, it's an excellent idea to keep detailed records of expenses just in case there is a deduction associated with the item or event.
If you’ve experienced any of these life changes, avoid missing any possible deductions by hiring a professional for your federal and state tax preparation. The experts at Essential Accounting & Tax Services offer competitive pricing to meet your budgetary needs. Contact them for an estimate by calling their Kalispell office at (406) 257-1455 or visit them online to learn more about their accounting services.