Most accountants in Orlando don’t ask this question to their clients, Do you have pets? Yes, we know how adorable these creatures can be. But did you know that while serving as a great comfort, they can also help you save money in taxes? So how is this possible? You love your pets; you provide them food; you take care of them when they are sick. All this incurs expenses which mean you should get tax breaks just as you when you have a dependent.
According to a survey, nearly $45 billion are spent on pets every year in the country. So how can you get tax advantages from the situation?
Before we proceed, you need to know that the price with which you buy a pet is not tax deductible. But there are some other tips that can help you in bring down your tax bills. We will only present you a quick review here and your accountant Orlando can provide you with the details.
Move your pets
You get a deduction when you relocate and incur moving expenses. Well, if you move your pets along with your belongings, you can maximize the deductible amount. Yes, we know this sounds a little weird, but since this is exempted from taxes, a lot of pet owners do not really mind.
Use pets to keep away pests
Do you have a pet because it can control pest? Even if this is not so, and you have a pet only because you love animals, you can still state this to the IRS. Let them know that your primary purpose of a pet is to keep away unwanted creatures and they might be generous to you. In such a case, you will not have to pay any taxes on the amounts you spend on your pet’s food.
Have a dog as a guard
Do you want someone or rather something as a guard to keep you safe the whole long day or to protect your house from unwanted entrants? Why not tell the IRS you have a dog for this very purpose? However, be sure that your dog must look fierce and can act as your guard. If you just have a poodle, the IRS is not going to believe when you claim this. Go for a German shepherd or a pit bull and be sure that he is guarding something.
Adopt an animal
Do you not have a pet? Adopt one and the IRS will provide you a deduction when you welcome the new member in your family. Please note that any donations that you make to an animal shelter are not exempted from taxes. It is only when you adopt an animal as a pet that you can use it as a deduction.
Train your dog
If you train your dog and he masters a certain skill, you will be paying lower taxes to the IRS. However, this will only be so when you submit proper documentation to the concerned authorities. Your accountant Orlando can advise you the proper procedure which you will have to follow for this.
Tax Tips for This Year
Do you want to pay a lower amount in taxes this year? Great, but how do you get it done? Avail the strategies that are given below and you might as well be able to achieve this aim.
Contribute to a retirement account
Start contributing your earnings to a retirement account if you do not already have one. You will have to get this done by the 15th of April, 2014 so that you do not miss the deadline. In case, your filing extension is delayed until the 15th of October, you can make contributions by this date.
This has two advantages: the first you already know about and the second is that your contributions are also tax-deferred. No other deal can be better than this.
Make an estimated tax payment at the last minute
If you delayed your taxes the whole year through, your tax amount will probably be too much. Moreover, you might also have to bear penalties and interests. Sounds bad, does it not? You can make the situation better if you pay an estimated tax.
As per the IRS rules, you have to pay all of last year’s tax and over 90% of the current year. If you fail to do this, you will be charged an underpayment penalty. In case your income crosses $150,000 you actually have to pay 110% of your tax amount so that you can protect yourself from the underpayment penalty.
Make a tax payment in the month of January, and you will be able to reduce some of this penalty. Ask your accountant Orlando and he will provide you more information about this.
Get your records organized
The biggest problem at tax time is to get your documents in order. If you planned your finances the whole year through, this will not be difficult. Prepare a checklist, correct all your receipts and gather other related documents.
Decide your status
The IRS categorizes tax payers according to different statuses. Take help form your accountant Orlando and he will notify you about yours. Accordingly, fill the tax returns as per the requirements.
Look for the right forms
You can download tax forms from the IRS website. You can also make use of a software, which will automatically provide you with the right forms.
Itemize tax deductions
Deductions bring down your taxes so make use of them as much as you can. Ask your accountant Orlando about those that can be applied in your case and avail them. Generally, this includes tax-preparation fees, business expenses, professional duties, mortgages, healthcare costs and so on.
Compare your itemize deductions with the standard deductions, and use the greater value.
Provide your dependent with a tax id
You should provide your dependents with a tax id as well on the return form. Fail to do this, and the IRS will not provide you with any personal exemption worth $3,900 for every employee.
If you need more information about our Orlando accounting and tax services, please contact us at 407-502-2400. Freedomtax Accounting’s staff has been providing honest accounting services and tax services for 15 years. Our Orlando accounting and tax firm has its main offices in Kissimmee, FL. Our services are provided nationwide, but mainly in the Central Florida market to areas like Orlando, South Orlando, Kissimmee, St. Cloud, Poinciana, Clermont, Davenport, and Hunters Creek, FL. Our tax accountants and IRS enrolled agents (irs ea) specialize in corporate accounting and bookkeeping, tax services, tax preparation, back taxes help, tax debt relief, tax resolution, tax planning, itin numbers, incorporations, and non profit 501c3 tax exempt status applications.