Watching What You Claim on Your Income Tax
Nowadays it is very hard to understand what is taxable and what is not. Meaning, there are probably quite a few questions as to what you can claim on your income tax at the end of the year. Many individuals choose to visit an accountant or a tax company, if they do not already have one on staff. Obviously any type of business needs someone to take care of the accounting tasks that are essential to having a thriving company. Not paying the proper amount can be very costly with the penalties that can be incurred if you choose to not to declare all you have made. Even if it might just be an error on your end, the problems you will have to deal with can be time consuming and even more costly than claiming the proper amount in the first place.
There are a few things that many individuals try and claim as expenses every year, and if you choose to do your own taxes, it is up to you to find out what can be claimed or not. One of the biggest claims every year that people make is for medical expenses that they think are covered as an expense, but in fact are not. In many cases quite a few things are covered, but there are also many items that are not that people try and use as a deduction, such as vitamins, over the counter medications and first aid items, such as bandages and anti-bacterial creams, for example.
For people that have their own business, it can be extremely confusing as to what can be claimed and what may not be. Not every small business has their own private accountant, and often they try and do their taxes themselves to try and save a few bucks. With this being said, the government individuals that process tax claims have quite a few stories of what people have tried to claim on their taxes.
Clothing is a big thing people try and claim, as well as many other personal items including grooming items like hair driers and even make up, claiming these were absolutely essential to their business and should be a deduction as a business expense. Another agent recounted how an individual thought that over $15,000 in home landscaping should be covered, even though his business had nothing to do with landscaping. He was an accountant that stated his lawn had to look good for potential clients that might visit his home because of a sign on the front lawn.
Public transit, student loans, child care as well as technological items like cell phones for example often are not eligible as an expense, but there are exceptions to the rule depending on the circumstances and this again is something you need to look into.
If you are unsure how to do your taxes, it is very advisable to seek out the help of a professional. They are many tax companies as well as private individuals that make it a point of knowing what can be claimed or not, and it will save you money and perhaps even make you money by using their knowledge to help you at the end of the year.