Tax Write Offs That Could Get You In Trouble In New York
Tax time is almost here. This year, as you're gathering all of your paperwork, you might want to make sure you are being careful with what you're writing off.
Filing taxes can be confusing
Doing your taxes can be confusing, especially if you're trying to do them on your own. That's why there are people that will prepare them for you. You want to make sure that you're deducting every possible thing you can so that your tax refund is as big as possible. Or at the very least, you don't have to pay any more than you absolutely have to. But you have to be careful not to write off a bunch of things that you're not allowed to write off, only to get audited and find out that that huge refund you were getting, isn't going to happen because you weren't supposed to write them off.
What can be written off on your taxes?
Turbo Tax defines a tax write-off as "a legitimate expense that lowers your taxable income on your tax return." You get what they call standard deductions, and then you can be eligible for extra credits like if you have children, or if you own a business, they want to encourage you to conduct good business. There are certain things that you are required to have to conduct business and some of those things can be "write-offs" on your taxes.
How can having a write-off help with your taxes?
Things that you can write off will lower your reported income. So while you might make $75,000, with the standard deductions, child tax credits, and write-offs, you might be able to lower that amount significantly and then have to pay fewer taxes (or get a bigger refund).
What CAN you write off on your taxes?
You can write off things that are ordinary and necessary to complete your job. You can write off business expenses, if you use your car for work (not getting to and from work, but if you actually use your car to do your job), If you use your home for work, The IRS says, "An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business." So travel expenses, internet bills, and phone bills would all apply.
But there are a bunch of things that people think they can write off as an ordinary expense, that aren't looked at that way by the law in New York.
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