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Taxes can take a major toll on your families expenses. Many people are frustrated because they feel that they are paying too much in taxes. Sadly, too many people are failing to take the proper deductions for their property and their expenditures. The key to saving money on your taxes is knowing what things you can deduct. Here are three deductions that you might not know about.
1. Charitable Donations
Any charitable donation that you make is tax deductible. This means if you donate money to a church, a second hand store, or any non-profit organization, you can deduct it from your taxes. The key here is making sure that you get the proper documentation.
In order to claim the charitable donation on your taxes you should have some sort of proof. Most non-profit organizations will have some sort of way to prove your donation with a receipt. If the donation is unique, ask the person or organization to which you donated the money to write a letter proving that the amount was donated or gifted.
2. Make Your Property More Energy Efficient
If you choose to buy a car that is energy efficient, or make repairs to your home that are good for the environment you can take certain deductions for it. You can qualify for certain tax credits where you will actually get money back and reimbursement on your taxes since you chose to become more energy efficient. This is because it is better for the community and the environment when you choose to conserve energy. The government wants to reward you for that.
Once again you will need to get documentation for proof, but it shouldn't be hard. The title of your car, the receipt for the solar panels, or windows that you installed should be enough.
3. Save For Retirement
Everyone should be saving for his or her retirement. But did you know that when you voluntarily put money away in your retirement savings accounts, they are tax deductible? That means that you are not only making a responsible financial choice by saving for the future, but you are going to save money on your taxes as well.
It is just important if you choose this route that you make sure the accounts you use can count for tax credits. Most IRAs and 401(k)s fit the bill.
If you are still looking for more ways to save on your taxes through deductions, you should talk to a certified public accountant or tax professional.
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