This post is sponsored by TaxAct, but as always all opinions and thoughts are my own.
Guess what time of the year it is?! Yes…it is spring, but it is also TAX SEASON! Pretty much everyone’s favorite time of the year. If you are anything like me, I absolutely dreaddd this time of the year (thankfully my husband doesn’t haha!). With tax laws changing every year, it can be difficult to figure out how to maximize your deductions.
This year, filing our taxes has been a little trickier- in addition to working as a nurse practitioner last year, I also grew my blogging business and officially became an entrepreneur. Scott and I knew very little about filing taxes as a ‘business owner,’ so we had to learn quickly! Enter TaxAct, a program that literally walks you through all the steps needed to file. The first thing we did was educate ourselves on the tax reform changeswe could expect this year. We learned that tax rates had changed, the standard deduction nearly doubled, miscellaneous deductions were suspended, personal deductions were eliminated, and the state/local tax deduction capped at $10,000.
After understanding the changes that we could expect, we started looking into how to maximize our tax deductions which would subsequently help to maximize our refund. I have always been a little confused about deductions, but we found a great article that educated us on available deductions here. I highly recommend reading this,as it was the most helpful piece of information we used this tax season. Below, I have included important deductions that applied to us (and may also apply to you as well!):
- Student Loan Interest Deduction: As many of you know, I went back to school to obtain my Doctorate of Nursing Practice degree a few years ago. Well, surprise, surprise, I had to take out student loans and am now paying them back. Under this deduction, if you pay interest on student loans, you may be able to deduct the interest, whether or not you itemized deductions. You deduct it as an adjustment to income, not an itemized deduction. By reducing your adjusted gross income, the student loan interest deduction may help you qualify for other tax benefits as well.
- The American Opportunity Credit: Scott is actually enrolled in school currently to obtain his Masters in Lean Manufacturing (don’t ask me what the heck that means haha!). The American Opportunity credit basically pays for up to the first $2,000 you spend on tuition, fees, books, supplies, and equipment by giving you a credit for up to 100% of that amount. If you qualify, it also gives you 25% of the next $2,000 back as a credit, for a total credit of up to $2,500.
Here are some other deductions that may apply to you:
- Child Tax Credit: Does this count for dogs? Just kidding- but if you have children, it is important to know that the maximum child credit doubled in 2018 to $2,000 per child under age 17. You can read more about this credit here.
- Child and Dependent Care Credit: Again, does this count for dogs?! HAHA! For my moms out there, this credit may help to cover up to 35 percent of those expenses. This is amazing, as I know so many families that utilize child care- and I know how expensive it can be! You can learn more about this credit here.
Because I was blogging in 2018, I also had to look into deductions for people who are self-employed. This articlewas a great resource of information (but you can find plenty more resources here) and this is what I learned:
- Mileage Deduction: Do you use your car for work? I travel quite a bit for meetings and trips, so this was a deduction that I wanted to look into. There are two ways to deduct vehicle expenses- you can either track all of your car expenses or deduct the portion that applies to business miles OR you can use the standard mileage deduction. This articleprovided a lot of useful information regarding this deduction.
- Meal/Entertainment Deduction: Do you take clients on business dinners? I have certainly been a part of work-related dinners and learned that I could deduct 50% of the cost of business meals. You can read more about these type of deductions here.
- Home Office Deduction: Do you work from home? As a blogger, I typically spend my days working from home in my office (still under construction for those of you who have been following a while haha!). You can deduct direct expenses related to your office (furniture, supplies, equipment, etc.) AND you can deduct a portion of your expenses related to your home. This includes your mortgage interest, insurance, utilities, property taxes, etc. What is important to remember is you need to figure out the percentage of the house devoted to the business and base the amount deductible off of that. You can read more about this deduction here.
I know that tax season can be stressful, so I hope you were able to learn more about ways to maximize your deductions and subsequent return! I cannot recommend the TaxAct blog here enough- it is so easy to maneuver and even has a ‘search’ bar so you can easily find what information you are looking for. Right now TaxAct is also offering up to a $100 bonus by placing part of your refund on a gift card! You can learn more information about that here. I also included a few other valuable resources below:
As always, thank you for reading my post and I hope you have a wonderful day!
