It’s tax season… yay. I spent most of yesterday going through bank statements, credit card statements, bills and receipts and adding up my business expenses to try and save on the amount of money we’re going to owe the IRS this year. Did I mention that this is my first year doing taxes as a self-employed citizen? It was a major headache, but I’m proud to report that I saved over $4K on my estimated tax bill, so I’d gladly do it again!
Over the last few months, I’ve been doing a lot of research on tax write-offs, and I’ve discovered a few little gems that I otherwise wouldn’t have known about. There are some smart ways to save on that April bill, (including buying an expensive item for your business before Dec. 31 hits so you can write it off — I plan to buy a computer at the end of 2016 to offset my self-employment income by a few grand.) Here are 4 more interesting tax write-offs that you may not have known about:
Exchange Student Tax Credit
My mom used to host exchange students, so she probably already knew about this one. But it was new to me. You may be able to get a tax credit of up to $50 a month if you host exchange students from foreign countries. But only under certain conditions:
- The student must not be a family member or relative of the host.
- The student must be enrolled full time in a high school or secondary program.
- The program sponsor and the taxpayer must have an official agreement in place.
- The program organization’s sole or primary reason for existence must be to provide educational opportunities and experiences for its students.
National Debt Contributions
Just like you can claim deductions for contributions you make to charity, you can claim a deduction on any contributions you make toward paying off the U.S. National Debt. We all know Uncle Sam could use our help with that $20 trillion dollar bill, right? To contribute to the deficit, you just mail a check to the address below:
Bureau of the Public Debt
P.O. Box 2188
Parkersburg, WV 26106-2188
Alternative Medical Treatments
When I learned this, I was like “whaaaa?” As someone who is a huge fan of alternative medicine, it got me pretty excited. I had previously thought that only conventional medical treatments like prescription drugs and hospital bills were eligible as write-offs, but apparently, you can also deduct less common treatments like acupuncture and herbal remedies. Who knew?! Our chiropractor is basically our doctor for everything, and she refers us to other alternative medical experts when needed, so this was great news for me!
As a mom of one (who’s about to be a mom of two), this was pretty exciting to hear! The Child/Dependent Care Credit covers childcare costs for working or job-seeking parents, you can also deduct babysitting costs incurred while doing volunteer work or work for a charity. Isn’t that awesome news?
Unfortunately, I was unable to use claim any of these deductions for this past year, but I’ll definitely keep them in mind for the next tax season!
What other tax write-offs have you taken advantage of in the past? Share your little-known tax-savings tips with us in the comments below.