How to Save Money on Next Year's Taxes
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How to Save Money on Next Year’s Taxes

Posted on Thursday, February 23rd, 2012 at 9:05 am
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Your Grocery Receipt Doesn’t Lie

The best time to begin preparing for next year’s taxes is right after you file this year’s.  Get into the habit of collecting, and organizing, the receipts for the purchases that you make.  Some of them can be used as a tax deduction.  In order to get the deduction, though, you must have the receipts as proof.

There are two ways that tax deductions can help you to save money on your taxes.  You can use them as a “write off” that will deduct the amount of taxes that you owe.  There is the potential that you could have accumulated enough of deductions to end up with a tax rebate, (or a larger tax rebate).  However, you can’t do this if you didn’t hang on to your receipts!

Find a way to organize the receipts that you will be collecting so that you can easily access them when it is time to do your taxes next year.  It doesn’t really matter what method of organization you choose to use, so long as it works for you.  You could get one of those accordion shaped file systems, that includes built in separations for several different folders.  Or, you could stick certain categories of receipts into a plastic, zip-lock, bag. Whatever works best for you is fine.

Are you planning on moving between now, and when next year’s taxes are due?  You can deduct at least some of your moving expenses from your taxes.  This would include things like the cost of the moving truck you rented, or the cost of the moving service that you hired to help you.  It might include the cost of the boxes you purchased to pack your belongings into.

You are allowed to deduct the cost of the medical expenses that were not covered by your health insurance.  If you don’t have health insurance, then you really need to hang onto each and every receipt or billing statement that connects to whatever medical bills you incurred this tax year.  Don’t forget to include the medical bills that came from the health care that your spouse, or your children, received.

Do you work from home?  Certain things that relate to your ability to work from home can be used as tax deductions.  Some of those things might include: upgrades to the computer that you use to do your work on, furniture that is used in a room that is a dedicated home office, the printer paper and ink that you need to use in order to do some aspect of your job.

The amount of money that you donate to charity can be used as a tax deduction.  Make sure you get a receipt for the amount that you donated.  This can include things like the check that you wrote to your favorite charity.  It can also include the financial equivalent of the clothing, or other items, that you donated to Goodwill.




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Good Tip: Saving money is important – especially if you have a lot of expenses like bills to pay, loans to pay off, and all the other things that drain your bank account. Figuring out a way to save money can feel tedious to some, and like a punishment to others. U.S. News suggests that you try one of these money saving challenges. The “No Eating Out for a Month” Challenge This one is self-explanatory. The goal is to avoid eating out for an entire month. This might be super easy for people who enjoy making meals at home. People who really enjoy dining out, or ordering food to be sent to their home, may struggle with this one. It’s worth a try because spending money on take-out is more expensive than buying groceries. The Pantry Challenge This one is a variation of the “No Eating Out for a Month” challenge. The goal is to use up all of your groceries before you buy more. It forces you to try and remember why you bought a food or beverage that you don’t know what to do with, and gives you the opportunity to find a way to use it. The one exemption to this challenge is the foods that have expired. Don’t eat them! Throw them in the trash. The “No Spend” Challenge Make a goal to avoid spending money during an entire weekend. The only exemption in this challenge is that you are allowed to pay bills. This challenge is interesting because it requires creativity. You must be creative and find workarounds for problems that you would typically solve by spending money. You may have a different outlook on spending after finishing this challenge.