When preparing taxes, many taxpayers forget to claim expenditures such as entertainment expenses, expenditures on business meals, and casualty losses. To bring down tax liability, businesses must calculate their entertainment costs, including business meals.
Some businesses make the mistake of claiming personal entertainment expenses as business expenses. If large amounts are claimed as entertainment expenditures on a tax return, it may catch the eye of the IRS and might lead to scrutinizing, even if they are legitimate. Therefore, taxpayers must only claim entertainment expenses that are directly related to the business. Taxpayers must also have proof such as receipt of the expenditure. It must show that the expense was because of business, and not personal pleasure.
If losses have been suffered because of natural disasters, theft, riot, or casualty, then taxpayers can claim them on their tax return. It includes any loss suffered due to an uncontrollable outside force such as natural disasters, theft etc. Businesses and individual taxpayers can reduce their tax liability by claiming these deductions when filing taxes.
When donating to charity, remember that for tax deduction purposes the charitable organization needs to be a qualified charity. Only donating to an IRS-qualified charity will allow you to deduct taxes.
There are many tax deductions and each one of them has qualifying criteria. Before filing taxes, taxpayers must educate themselves about the new and old tax deductions so that they may be able to reduce their total tax amount.