Get to know these tax-saving termsJune 21, 2017As you begin to think about scheduling your midyear tax planning appointment, refresh your memory on the meanings of terms that can save you money. Here are three.
Above the line deductions, such as alimony paid, can be claimed even if you don’t itemize. Itemized deductions are a specific group of expenses, including amounts you pay for certain taxes, medical costs, charitable donations, mortgage interest, and disaster losses. The standard deduction is a simplified substitute for itemized deductions. It’s a flat amount you can use to reduce your gross income instead of itemizing each allowable expense. Business deductions are the ordinary and necessary expenses required for carrying on your trade or business.
Tax credits can be refundable, meaning you’ll get money back if the credit exceeds the amount of tax you owe. Nonrefundable credits can only reduce your tax to zero. These terms can be confusing. Call if you have questions about these tax-savers and how including them in your midyear planning can benefit you. (Owensboro (270) 926-4540 / Evansville (812) 423-0300. |
|