Itemizing is always a good practice whether you have a business of your own or if you have a full time job. With the renewed tax policies, there are chances that you are unaware of how you can save money. Having your wages deducted is bad enough, however to know that you are over paying or even losing money is even tragic.
A tutoring business can get very tricky in terms of all the extra or miscellaneous expenses. As a tutor itemizing your weekly expenses can prove beneficial not only in terms of accounting but can also save you a few hundred dollars each year. In fact, if you pay keen attention and record all your business expenses there is a fair chance of you redeeming almost 100% of the amount from your taxes!
Many tutors are unaware of the various deductions that are applicable by just keeping a simple record of all the ‘out of pocket expenses’. Classroom supplies, student requirements and even travel expenses are all deductible from the tax you pay to the government. By just keeping a track of these items on a weekly basis, you can save a substantial amount of money from you taxes.
Some of the deductible expenses from your taxes include –
- Software used as teaching aid
- Research materials
- Computer supplies and other class room supplies such as stationary for students and teachers
- Teaching aid- transparencies, models and pointers
- Union dues and other union fees
- Books for classroom
- Job hunting expenses (in the same trade)
- Any sort of uniform used which also includes upkeep and cleaning.
- Educational expenses for improving and maintaining tutorial (job related) skills.
- Laboratory fees, professional journals and other aid for student development.
The newer clauses also allow you to claim travel expenses, meals and mileage that are strictly job related. This is very beneficial for those who provide home based tutoring services. However the clause does get tricky for those who have a full time job at a school or an institution.
With a Home tutoring business there are also other deductions that are applicable. If you have a home based business where you are using your home as your office you are liable to claim a further reduction in your taxes. However these rules are very stringent and hence it is advised that you seek professional consultation, to have a thorough understanding of your stand.
Disclaimer: Please consult with a tax professional regarding the various items that may be deducted. This blog posting is for general information purposes only.