Some ways to save on Income Tax

When it is time to do your taxes in New York you may do your own taxes or you may get the help of a New York CPA or an accountant in NY to do your tax preparation. Even the most qualified people can make a mistake so the more you know about tax time the better you can be prepared for your appointment. There are 3 ways to save on income tax. Do you know what they are?

The first way to save money is through an EITC, or Earned Income Tax Credit. This may sound like something that you don't qualify for but if you have a job you qualify. This is a tax credit given to certain people who fit the following criteria: you must work for a living and fall within a certain guideline. You must also be of age, and meet dependency requirements and be a U.S. citizen. Not everyone qualifies for this type of credit so not everyone is familiar with how it works. If you are not sure if you qualify then you can log online to IRS website
(www.irs.gov) and read the description of qualification or ask a NY CPA. If you think that you qualify don't forget to mention it to your tax preparer when you go to them.

When you have your income tax prepared for the year you need to also pay attention to the child tax credit. This has been given to certain people before but this year it is going to be even more because so many people are without a job.

Donations are a great way to save on income taxes in New York and other states and help others during the year. When you give it is important that you keep a copy of the check that you are sending or you can obtain a written paper stating that a certain amount was paid to them over the year. This is very important because without this paper or copy of the check you have no proof to the IRS that you paid a certain amount in donations and you cannot use it.

If you run your own business it's important to keep track of everything you purchase to keep your business running. This is all considered a loss and if you can show more loss at the end of the year then gain then you won't have to pay too much in New York taxes . You will always need to pay in state taxes where your business is being conducted but you won't need to pay federal unless you make a certain amount.

If your child is in college and you are paying college tuition then you need to keep track of all these expenses. When you add college tuition to your expenses you can itemize everything; room and board, books, supplies, vehicle payment and expenses, insurance, gas expenses and more. You can also itemize health care expenses and any other expenses that are associated with that child.

Jonathan Medows, CPA, MBA is the Managing Member of MEDOWS CPA, PLLC, a boutique New York CPA firm serving the needs of individuals, freelancers, self employed individuals & small businesses. To see how he can help you reduce your tax liability and keep you in tax compliance please visit his website:
Medowscpa.com