10 Tax Saving Tips

[netfree]

Here are some basic tips for saving on your taxes.

1. Keep all business-related receipts. Keep track of what the receipts are for, and save them in a safe place.

2. Deductions. Many people neglect to carefully look for, and claim, all the deductions to which they're entitled. By simply taking the standard deduction, you may miss out on other available deductions.

3. Take all applicable tax credits. For each child under the age of 17, there is up to a $1,000 tax credit. There are also various other credits, such as those available when you adopt a child or when you elect to claim a Lifetime Learning Credit.

4. Take a loss. If you’ve done well with your investments and are looking at significant capital gains, prior to year-end is the time to offset some of those gains by selling a losing venture. Also, remember that you can carry forward up to $3,000 from previous years’ losses.

5. Consider tax-free investments. Returns are not very high, but if you're looking for a safe, tax-friendly investment, consider tax-free government or municipal bonds, among other such investments. This type of investment is particularly good for a high-income individual.

6. Remember charitable donations. While donations should not be made simply for tax purposes but for philanthropic reasons, you can always make a couple more at the end of the year to lower your tax bite. Remember to get receipts.

7. Gift if you can. You can give up to $12,000 away tax-free to each person you choose. This is typically for retirees with significant assets who want to gift money now, rather than leave it for estate taxes later.

8. Max out your IRA or other retirement plan contributions. Of course, by doing so you're assuming that your personal income will be lower when you withdraw the money. While that may or may not be the case, it’s safe to say that, if there are a number of years until you start taking distributions, the tax laws will likely change many times over between now and then — hopefully in your favor.

9. Put your (over 14-year-old) children on the payroll. By having them do some work for you, you’ll be able to shift some of your income that would be taxed at a higher rate to their lower tax bracket without being hit with kiddie taxes. Be careful, however, because college financial aid could be affected by their income.

10. Double-check your work. Errors in tax preparation and on tax returns account for millions of dollars that taxpayers could have saved every year. Remember to double-check everything.

[restmen]

yes this is good shits

[teamnemesis]

ill be coming back here when im moving out =D

[ftvfatboy]

do u folow any tqm principle here

[finsterlaw]

thanks for the tips, need to get on top of my tax.

[dround]

Tax savings.

How can we make sure that we don't pay tax un-necessarily?

Being from the UK this may seem slightly biased to UK Residents but please try and apply it to your own country and systems.

What is the point in having savings accounts?

Rather a strange question? Well, I will explain this for you:-

As a UK Tax payer, you probably earn yourself a living where be it at the end of the week, Bi-weekly or monthly you receive a payslip with your earnings explained for the previous period of work. It always seems that the deductions section is a large section, we never seem to complain and we make provisions with the remaining amount that hits our bank accounts/back pockets. From this amount, we look to make savings hoping to earn interest, but is this really what we should be doing?

No!

What most people do not realise is that when they save and earn interest, they then pay a great proportion of this interest in tax..

What should we be doing?

Rather than having savings we should be looking at investments, whether this be ISA's or any other tax free saving method is entirely your choice but you should really make the most of this opportunity.

In my next post I will explain other ways to save money which will appeal to those of you with Mortgages.

[ssgargya]

great info...does it apply to 2008 tax year or is it from 2007?

[brigandze]

thx for the advice

[Swazy]

thanx for ur advice needed a lil help

[rockthebox]

this is good stuff, thanks