3 Massive Tax Deductions You Need To Know

Understanding tax deductions can significantly increase your business's profitability. In this post, we explore a few unique methods to maximize deductions and reduce your taxable income. This is not tax advise. It is written to broaden your awareness of strategies available. Meet with your licensed tax professional to implement proper strategy.

1. GIF Leaseback Technique

This deduction strategy allows you to deduct your assets twice. Here's how it works:

• Gift your asset, such as a car, to someone.
• Lease it back from them.
• Claim the lease expense as a deduction, reducing your taxable income.

The leasing party receives the income while you benefit from the deduction.

2. The Blueprint Magic Trick

For home business owners, understanding this loophole can enhance your deductions:

1. Secure the blueprints of your home.
2. Remove any common areas such as hallways and throughways from your calculations.

This simple adjustment can increase your deductions by up to 25% without additional effort.

3. The Augusta Rule

This rule allows you to rent your residence up to 14 times a year without reporting the rental income on tax returns. Here's how to take advantage:

• Your business can rent your house for meetings.
• Pay yourself a reasonable rent from your business.
• Deduct the rent payment from your business tax return.

This technique allows you to enjoy tax-free rental income and reduce your business tax liability.

By strategically using these deductions, you can minimize your tax burden and invest more back into your business's growth. Always consult with a tax professional to ensure these methods are applicable to your individual situation.