Your Twenties and Thirties is an exciting time
Your. career takes shape, you may be buying a house. You may even be starting a side business or start investing.
As you start to make more money, you may find you also pay more taxes.
It is important to plan ahead so that you get all the tax benefits you're entitled
These tax issues, auto expenses to zero refund tax may affect you as Millennial work :.
automobile expenses
you drive your car almost every day. Some of these miles are probably deductible.
You can take the standard mileage deduction in most cases, when you use your car for business (as a person self-employed or as an employee), when driving to the doctor during a deductible move, or when you are volunteering for a charity.
as an employee for mileage or for medical purposes, your total expenses in each category must exceed a threshold before you get a deduction.
The standard deduction for the use of a car in 2014 is 56 cents per mile for business miles, 23.5 cents per mile for medical or moving, and 14 cents per mile led the service charities.
sure to keep written records with the date, distance and purpose.
bad debt
now that you're making money, you can find people who want to borrow from you.
If you can not get a refund, you have a real debt, and if you have made efforts to collect, you may be able to deduct the bad debt as a loss of short-term capital .
gains and losses [capital
Plan your capital gains and losses -. before you sell
assets are most assets you own that are not for business. Your car, boat, and investments are all assets.
If you sell a capital asset at a gain, pay attention to the minimum holding period for long-term capital gain if possible.
If you sell a property one year or less after your purchase, you have a short-term gain
Wait until "more than" a year .; for example, a year and a day, and there is a long-term gain.
The tax savings can be very significant.
dependency exemptions
Every child you claim as a dependent reduces your taxable income in 2014 by $ 3.950. You will get this exemption full year, even if your child was born on New Year's Eve.
Do not forget to claim calling the foster children, a child who lives with you but is the school, and in some cases, a child you support who lives with the other parent of the child.
you might also be able to take a dependency exemption for your parents supporting you, or nonrelatives living with you, if they meet the IRS requirements.
in force and marginal tax rates
As your income increases, it is important to know the difference between the effective tax rates and marginal so you can plan effectively.
Your effective tax rate is the percentage of your total taxable income that you pay tax.
your marginal tax rate is the rate you pay on the next dollar you earn. Your marginal tax rate is generally more useful tax planning.
For example, if your marginal rate is 25%, you know that if you win $ 100, you must pay $ 25 of it in income taxes.
remember Social Security and Medicare, and state taxes.
Use this calculator to determine your tax rate.
pension plans sponsored by the employer
If your employer has a pension plan, make sure to sign up as soon as you are eligible.
the minimum you must contribute to the plan is the amount your employer will match.
deduction Home Office, reinvented
The home office deduction is always a little tricky.
Of course, there is a large deduction for people who work at home, but it is also complicated to calculate and some people say it can be a red flag for audits.
Discover the new improved deduction for home office.
If you qualify, you deduct $ 5 per square foot for a maximum of 300 square feet for office deduction maximum simplified home $ 1,500.
insurance
you may be able to deduct the premiums you pay for your wardrobe.
If you are self employed, you can deduct 100% of independent health insurance premiums and dental insurance premiums, even if you do not itemize deductions.
you can also deduct long-term care insurance premiums, up to a limit.
your deduction is also limited by your net employment income after pension contributions and the deduction of self-employment tax.
expenditures job search
looking for a new job can be expensive, especially if you pay the agency fees or traveling to interview for a job.
If your total miscellaneous itemized deductions, including research costs of employment, exceed 2% of your adjusted gross income, you may be able to take a deduction for eligible expenditures.
mortgage interest deduction
The deduction of mortgage interest is a powerful incentive to purchase a home.
You can deduct interest on up to $ 1 million debt to total acquisition on your main and second home.
your "second home" can be a cabin on the lake, or motor home, so he has room, restrooms, and sleep.
You can also deduct the interest on a mortgage, but be careful. You can not deduct interest on $ 100,000 of home equity debt.
Residence Sales
Most people know that selling a home is generally not a taxable event.
Make sure you play by the rules if you sell a house has increased in value, though, or you might have a large tax bill.
you and your spouse usually need to live in the house and owning two of the last five years to claim exemption of $ 250,000 ($ 500,000 if married filing jointly).
As with most tax issues, there are exceptions for special circumstances.
employment income
Whether you are an independent income on the side, or if you left the corporate world completely and use your own show, you can be self-employed in the eyes of the IRS.
you must pay self-employment tax, 15.3% of your net income on your tax return on income.
The good news is that you must also be able to take other business deductions, such as IT expenses, home office expenses, vehicle expenses and travel, and so after.
zero tax refund
We all love a good return, but there is only one thing better -. be able to keep and use your own money in the first place
With proper tax planning, and using TaxACT, you can have just the right amount of tax withheld and make the best estimate for your quarterly tax payments, if necessary.
in this way, you have neither a large tax bill or a bargain when you file your tax return.
There's your money. The closer your refund is to zero, the better you have to keep your money in your wallet all year. Tweet this
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