Many people believe that the United States is a high-tax country. In fact, if you understand U.S. tax laws, you can legally avoid taxes and save many expenses. Worldway Group's U.S. immigration experts introduce the following 50 tax-deductible expenses, which are worth keeping for new U.S. immigrant investors.
1. Income taxes paid to state (provincial), local, or foreign governments, as well as personal property taxes related to cars, boats, and real estate.
2. Employee contributions to state (provincial) disability funds (i.e., SDI on pay stubs).
3. Funds injected into retirement plans (including IRA, Keogh, or SEP) or medical savings accounts.
4. Student loan interest (capped at $1,500).
5. Legal fees paid to generate income, such as alimony.
6. Gambling losses (capped at the amount of gambling winnings).
7. Market value of clothing, computers, and household goods donated for charitable purposes.
8. Expenses paid for the appraisal of charitable donations or casualty losses.
9. Automobile expenses incurred for charitable work (14 cents per mile) and other expenses.
10. A portion of the value of cookies donated to the Girl Scouts.
11. Depreciation of commercial vehicles; depreciation for SUVs weighing no less than 6,001 pounds can reach $19,000.
12. Small prizes or rewards given by employers to boost employee morale, and commercial gifts with a unit price not exceeding $25, can be tax-deductible if the expenses are not reimbursed.
13. 60% of health insurance premiums for self-employed individuals (if medical expense deductions exceed the 7% limit, the remaining 40% can be deducted from Plan A).
14. Vacation and cleaning expenses during business travel.
15. Expenses for business tools with a lifespan of less than one year.
16. Half of the self-employment tax.
17. A portion of business losses from the previous year.
18. Expenses incurred in searching for a new job in the same industry, including fees paid to employment agencies and resume preparation, as well as moving expenses for starting a new job.
19. Subscription fees for professional magazines and newspapers.
20. Union dues.
21. Educational expenses to maintain or improve skills for one's current job.
22. Expenses for uniforms and work clothes that are not suitable for everyday wear (can also include cleaning costs).
23. Expenses for protective clothing such as safety goggles and work gloves.
24. Transportation expenses to temporary work locations.
25. When selling a primary residence, couples can deduct $500,000 in capital gains, and individuals can deduct $250,000 in capital gains.
26. Expenses related to a home office.
27. Commissions and closing costs paid when selling property.
28. Home mortgage interest; refinancing costs; penalties for early or late mortgage payments.
29. Expenses for computer software and online services purchased and used to track personal investments, as well as subscription fees for magazines and newsletters to obtain investment advice.
30. Fees paid for investment advice from financial advisors.
31. Fees for safe deposit boxes used to store stocks and other investment-related documents.
32. Margin interest for buying and selling stocks, including stock options.
33. Interest on bonds purchased between interest payment dates.
34. IRA management fees not paid from the IRA account.
35. Penalties for early withdrawal of savings.
36. Capital losses, including worthless stocks, capped at $3,000.
37. Taxes already paid in foreign countries.
38. If certain small business stocks are held for more than five years, half of the gains can be deducted when these stocks are sold or exchanged.
39. Medical expenses including contact lenses, regular glasses, dentures, hearing aids, and orthopedic shoes.
40. Expenses for weight-loss programs used to treat conditions such as high stress or obesity.
41. Certain expenses for childbirth preparation classes.
42. Expenses for sterilization, abortion, and contraception procedures based on a doctor's prescription.
43. Unreimbursed expenses for smoking cessation programs and medications.
