Welcome to Money Mondays, where we consider new ways to save money, and to become good stewards of the Lord’s blessing of our finances.
As promised last time, I have a few tips for you to save money when you pay your taxes to the tax man; the best way to avoid the tax man is to pay him his due — on time!
As Jesus instructed:
“Give to Caesar what is Caesar’s, and to God what is God’s.” Matthew 22:22
If you want to live in America, you have to pay the piper, better known as the tax man! We won’t even get into the constitutionality of income taxes in this blog, but there are certain taxes that you have to pay — even while kicking and screaming! You might not agree with how they spend the money, but as law-abiding citizens we pay our taxes — albeit grudgingly.
So, how can we make an effort to be frugal and good stewards when it comes to paying taxes?
Instead of taking the standard deduction on your income tax return, you might check to see if you would receive more benefit with itemized deductions for combined medical expenses (only what is in excess of 7.5% of adjusted gross income), interest on your home loan, charitable contributions, unreimbursed job expenses and more.
If you are generous with charitable organizations and tithe, plus have a home mortgage, you might find that you receive more of a deduction with itemizing, than the standard deduction (which is based on age, marital status, and whether you are blind or bought a new vehicle. . .). It doesn’t really take that much time to itemize. Just keep a file folder with receipts of medical expenses, year-end mortgage interest statement from bank, statements from charitable organizations and receipts for donations to qualified organizations, and list them on the Schedule A.
If you regularly volunteer for a qualifying tax exempt organization, such as your church, community organizations, or participate in charitable events, you can deduct the gasoline, or take the standard mileage rate of 14 cents per gallon for the travel to the events where you volunteer your time. That can add up to a significant deduction. You can also deduct the fair market value of property that you donate to those organizations.
Ever supply snacks for the community soccer team, or food for a Boy Scout camp-out, or crafts supplies for VBS? You can deduct out-of-pocket expenses donated to a qualified organization. Make sure that you are receiving full deductions for which you are entitled, and be sure to ask for a receipt for your donations.
When you clean out your closets, instead of having a garage sale, consider donating those clothes and toys to a recognized charity — be sure to ask for a receipt for your donation. Donations of good used clothing and furniture can add up to a significant amount on your tax refund. Consider that the time and expense you invest in a garage sale might not give you nearly the benefit of that tax rebate.
Instead of selling an old car, consider donating it to an eligible organization that supplies vehicles to missionaries, and you can deduct the fair market value of the vehicle (after you fill out the proper form).
Take advantage of IRA’s, 401-K’s, cafeteria plans and HSA options offered by your employer so that a portion of your wages goes tax free into an account to pay for things you will need to buy anyway, such as dental and eye-care expenses and other health expenses, retirement, etc.
I ran out of room, so join me for the next Money Monday, and I’ll tell you how to use your children to best advantage for a tax refund!
By the way, I’m not an accountant, and I don’t give tax advice — just practical money saving tips!! Check with your accountant before you try these tips, and check the IRS website for other tax preparation tips.
And, I hope that this doesn’t prompt an audit of my ‘meticulously’ kept IRS records shoved in that shoe box, . . . because I have receipts!