#598: Tax day is approaching, and if you're like most people, you might be overlooking deductions that could save you money.
In our latest podcast episode, tax strategist Natalie Kolodij joins us to reveal common tax misconceptions and share strategies that could potentially lower your tax bill.
"The tax code is 70,000 pages," Natalie explains. "There's so much. So I really like to have people focus on a handful of things to be mindful of."
For W-2 employees who often have fewer tax advantages, Natalie highlights several overlooked deductions. If you live in a state without income tax (like Florida or Washington), you can deduct sales tax instead — especially on major purchases. Don't forget about personal property taxes on vehicles, boats or RVs either.
Medical expenses can be deductible, but only amounts exceeding 7.5 percent of your adjusted gross income. Natalie suggests consolidating elective procedures into a single tax year to maximize this benefit.
Charitable deductions offer surprising opportunities too. Miles driven while volunteering, expenses from fostering animals, and even home renovation materials donated to organizations like Habitat for Humanity can all qualify. Natalie also explains how "bunching" donations in alternate years can significantly increase tax savings compared to giving the same amount annually.
The interview tackles major misconceptions about selling your primary residence. While many believe living in a home for two years makes all gains tax-free, Natalie clarifies that any "non-qualified use" periods (like when it was a rental property) can still be taxable.
For small business owners and real estate investors, Natalie recommends tracking all business-related expenses — even seemingly minor ones like industry-related books or educational materials. She emphasizes the importance of proper record-keeping and having separate accounts for business expenses.
As we navigate tax law changes following the recent election, Natalie's advice rings true: maintain flexibility in your tax planning and consider working with professionals who specialize in your specific situation.
Timestamps:
Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths.
(0:00) Intro to tax day discussion
(2:46) Common tax savings for W-2 employees
(4:12) Standard vs itemized deductions explained
(5:46) Often forgotten property tax deductions
(6:58) Sales tax deductions for no-income-tax states
(9:06) Medical expense deduction thresholds
(12:53) Charitable giving strategies and overlooked deductions
(17:51) Bunching donations in alternate years
(22:20) Home sale tax exclusion misconceptions
(30:44) Tax withholding changes and common mistakes
(44:35) Bonus payment tax myths debunked
(52:52) Finding the right tax professional
(1:02:02) Small business and real estate investor tips
(1:09:38) Best practices for tax record keeping
(1:15:14) Preparing for potential tax code changes
For more information, visit the show notes at https://affordanything.com/episode598
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