Lower Your Taxes with Deductible Expenses and Adjustments

Adjustments are certain expenses which directly reduce your total income. Basically these are tax deductions. You do not need to itemize your deductions in order to claim these expenses. The following are the most widely used adjustments used to lower your tax liability:

·         Contributions to your traditional or SEP-IRA

·         Moving expenses

·         College expenses

·         Medical and dental expenses

·         Real estate taxes

·         Interest paid on mortgage

·         Gifts to charities and churches

·         Daycare or childcare costs.

·         Form 1098 for mortgage interest

·         Form 1098-E for student loan interest

·         Summary of federal and state estimated tax payments

   ·         Alimony paid

Income Documents Needed for Filing Taxes

The first piece of information you’ll need to prepare your tax return is the total income you earned during the year. Any employer that pays your salary must send you a W-2 by January 31,  which reports your annual income and tax withheld. Independent contractors typically receive income reports on Form 1099-MISC. 

·         W-2s from your employers

·         1099-MISC forms for self-employment income

·         1099-INT (interest) and 1099-DIV (dividends) forms

·         1099-B forms showing brokerage trades in stocks and bonds

·         K-1 forms for income from a partnership, small business, or trust

·         1099-SSA form showing Social Security received