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Maximize Your Tax refund: Top 10 Tax Write-offs for the 2023 Tax Filing Season

Maximize Your Tax refund: Top 10 Tax Write-offs for the 2023 Tax Filing Season

In the 2023 tax filing season, taxpayers are searching for new ways to lower the tax they owe. One effective strategy is to take advantage of tax write-offs, which are deductions that can help lower your taxable income and save you money on your tax bill. Here, we’ll take a look at the top 10 tax write-offs for the 2023 tax filing season, including everything from charitable donations to home office expenses. So if you're looking to minimize your tax burden and keep more of your hard-earned money, read on for valuable tips and insights!

Key highlights:

Some tax write-offs for 2023 are better than others
There are different tax write-offs available for different types of taxpayers
If you work for yourself, you can claim more deductions than a W-2 employee

Table of contents

What’s a tax write-off?...Read more

What’s a tax write-off?

A tax write-off is any expense that can be deducted from your taxable income to reduce the amount of tax you owe. Tax write-offs lower your tax bill by subtracting qualifying expenses from your total income, thereby lowering the amount of income that is subject to taxation. Tax write-offs can help a wide range of taxpayers save on taxes, including W-2 employees, independent contractors, self-employed individuals, freelancers and small business owners. For W-2 employees, tax write-offs typically include expenses like student loan interest, mortgage interest and retirement plans. Independent contractors, self-employed individuals and freelancers, on the other hand, can deduct expenses related to their work, called self-employment deductions. This includes things like home office expenses, equipment purchases and business-related travel. Anyone who works for themselves can take advantage of these and other business expenses like advertising, rent and benefits for their employees.

Infographic entitled 3 Criteria to Qualify for a Tax Write-off, showing how business expenses can qualify as tax write-offs.

Regardless of your employment status, it's important to keep accurate records of all your expenses throughout the year, so that you can take advantage of all the tax write-offs you qualify for. When it comes time to file your taxes, you'll be able to lower your taxable income and pay less in tax. This is especially useful if you have to pay estimated taxes. With that in mind, let’s look at the tax write-offs that could help maximize different tax savings for different types of taxpayers in the 2023 tax filing season. Tax write-offs and credits for W-2 employees:

1. W-2 employees can take reimbursements from their employers for work-related travel expenses, such as transportation, lodging and meals. These can be termed as indirect write-offs. If you are working as a delivery driver for a delivery company as a W-2 employee then you may be able to get these reimbursements from your employer, who can mark them as a write-off on their taxes.
2. If you want to upskill while you work, you can claim the lifetime learning credit, if you are enrolled in an institution of higher education.

Infographic entitled Criteria for Claiming Lifetime Learning Credit, showing information about a tax credit, as opposed to tax write-offs.

To get a clear idea of these deductions, you can get in touch with a FlyFin CPA. The following four types of taxpayers can claim all of these write-offs if they qualify for them. Tax write-offs for independent contractors: Independent contractors are independent of a full-time commitment to a single company. These professionals work for companies and individuals on a contractual basis and are often referred to as 1099 workers or 1099 employees. Since these individuals don’t have an employer to provide what they need to do their work, they are allowed to deduct almost any business expense, including:

3. Home office expenses, including a portion of rent expenses and utilities like electricity, internet and water, as well as maintenance expenses. The amount of these deductions is proportional to the area of space you use in your home.
4. Independent contractors can also directly deduct business-related travel expenses, including transportation, hotel stays and meals. Unlikely W-2 employees who get a refund from their employer, independent contractors write-off business deductions directly from their taxable income.

Tax write-offs for self-employed individuals: Self-employed individuals, who work for themselves, can also be considered independent contractors. The main distinction is that a self-employed person provides their own product or service (doctors, dentists, software developers, artists, musicians), while an independent contractor provides labor.

5. Self-employed individuals can write off business equipment purchases like a work table if you're a dentist, a violin if you're a musician or software if you're a programmer.
6. A self-employed individual can also deduct health insurance premiums paid for themselves or any eligible dependents. For details of how to claim your health insurance premiums and hospital expenses, read this guide.

Infographic entitled Top 3 Tax Forms for Self-employed Individuals and showing Form 1040 Schedule C,Form 1040 Schedule SE and 1099 forms.

Tax write-offs for freelancers: Freelancers are more similar to independent contractors than self-employed individuals in that they take up jobs on a solely temporary basis. These are professionals who work on a contract basis with companies or individuals for a limited period of time. For this reason, freelancers are also referred to as gig workers and are part of the larger gig economy.

7. In addition to the write-offs mentioned for independent contractors and self-employed individuals, freelancers can also deduct business-related legal and professional fees, such as money paid for accounting or tax preparation services.
8. Freelancers can also deduct advertising and marketing expenses, such as website development or social media ads, as long as they promote their business.

Tax write-offs for small business owners: Small business owners, including sole proprietors, Limited Liability Companies (LLCs), partnerships and S-corporations can also write-off all the business expenses mentioned above. They can also deduct the following:

9. Employee benefit expenses, such as retirement plans like IRAs, 401(k)s or health insurance expenses.
10. Their share of self-employment tax, also known as SECA tax, if they have an employee or employees.

The IRS says that these 1099 tax write-offs must be ordinary and necessary for your line of business, meaning that the expenses you claim as write-offs must be essential to do your work, as a computer is essential for a freelance software developer. Other IRS criteria to claim write-offs include the requirement that deductions be expenses from business activity that is your main source of income. Finding all these deductions in time to do your taxes can be very difficult, but you can use FlyFin to make finding deductions and filing your taxes effortless and fast. And you can save thousands of dollars in taxes. FlyFin is a smart, A.I.-enabled mobile app and web platform that helps 1099 taxpayers find all their deductions in minutes and save thousands on taxes.

Tax Write-Offs

Self-employed individuals can use tax write-offs to lower taxes. These itemized deductions should be reported on Schedule C.

Maximize Your Tax refund: Top 10 Tax Write-offs for the 2023 Tax Filing Season

What’s a tax write-off?

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