At the end of the year, many begin to think about how they want to improve their lives in the New Year. When it comes to New Year’s resolutions ideas, there are a lot of surprising tax deductions you probably haven’t thought about.
If your resolutions fit certain guidelines as described below, they may be tax deductible, which would be a win-win for you and a great way to start the New Year!
Below are five New Year’s resolutions ideas and how they could be tax-deductible. If you have any questions about if other resolutions might be tax-deductible or how your unique situation differs from these below, please call or stop by an ATAX office nearby.
1. Getting in Shape/Losing Weight: You can deduct the costs of weight loss programs and attending
weight loss meetings as medical expenses if they are to treat a specific
illness diagnosed by a doctor, such as heart disease, diabetes, obesity, or
high blood pressure. If you go to weight loss exercise groups at your gym, you may
be able to deduct the cost of those programs, but not the overall cost of a gym
membership. And if you’re prescribed specific foods that treat your illness but
don’t satisfy normal nutritional needs, you may be able to deduct the
difference in cost between these foods and normal foods. Just make sure to have
your doctor’s recommendations in writing.
2. Volunteering for a Charity: Many of us want to do as much as possible to help support our favorite charity. Volunteering can be rewarding both spiritually and financially. While you can’t deduct your time working at a charity, you may be able to get a deduction for the money you donated, supplies you bought and donated, and even mileage expenses for driving to get to the charity. Be sure to keep track of your mileage and hold on to any receipts.
3. Learning a New Skill/Going Back to School: You may be able to claim the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC) if you go to a qualifying college or trade school. But be aware that the IRS only allows one of these credits to be claimed per student per year. Depending on your personal educational situation, one of these two credits can be more valuable for you than the other. ATAX can help find out which credits you’re eligible to claim and will help you save the most on your taxes.
4. Traveling: We would all love it if we could get a tax deduction whenever we took a vacation, but unfortunately, the IRS doesn’t see all travel equally. However, you may be able to deduct qualifying expenses for business trips that were not reimbursed by your employer. There are two requirements that determine if a travel expense is tax-deductible: you require sleep to meet the demands of your work while you’re away from home, and your work forces you to be away from your normal place of business longer than a typical workday. Deductible expenses can include hotels, tolls, and transportation.
5. Paying Off Debt: Consumer debt, like from credit cards, is not tax-deductible. But if you have a mortgage or student loan, you should be able to deduct your interest payments. Since most people can deduct interest paid on a home’s mortgage and a home equity loan, it can be a good idea to pay off credit card debt through the mortgage or home equity line. This could help you get out of high-interest credit card debt with interest that is tax-deductible.
We know this is a lot of stuff to take in, but don’t worry. ATAX makes it easy to get you all the deductions you’re entitled to. When you file with us, you don’t have to know all the details. We’ll ask you the right questions to get you the biggest refund possible.
Good luck with your New Year’s resolutions ideas! And remember, taking that first step is the hardest. Once you’ve done that, it gets much easier. Don’t give up!
To learn more valuable tax information, call ATAX toll free at 1-866-999-2829, or stop by an ATAX office located conveniently nearby. You can also follow us in real-time on Facebook, LinkedIn, and Twitter.