Saving money on taxes can be done several ways. You need to look at preparing your taxes from multiple angles to figure out what best suits your situation. The following examples are some of the ways you can reduce your tax liability.
Filing taxes on time whether it’s for the deadline or an extension eliminates fines for late filing. It’s a good idea to always stay up to date on taxes as it reflects on reputation. Another advantage to filing on time is to avoid delays in receiving refunds.
If you run your own business then you can deduct several expenses including equipment, office supplies and phone. Many home businesses involve computer software and maintenance expenses which can be deducted as well.
If you suffer financial loss from selling an asset at a lower price than the purchase price, the loss can be deducted. In the case of stocks you will not get the tax benefit of the loss if you repurchase the stock within 30 days of selling it.
In some cases you can get tax benefits for the interest you pay on your home mortgage. Please note that there are several factors that will determine if you qualify for this.
There are tax benefits to purchasing eco-friendly products such as a PV system with solar panels. The government provides significant tax credits for going green. A low-emissions vehicle is taxed at a lower rate at the time of purchase.
Contributions to an IRA, pension or other type of retirement plan can help reduce gross income. Making the maximum contribution helps build your future and reduce taxes at the same time.
You can transfer savings and other assets to your spouse or partner if they pay a lower tax rate. This transfer, however, may require that you pay a capital gains tax.
Find out from your employer if they have established a childcare program which may include tax credits. You can get tax breaks if your employer provides a workplace nursery or childcare vouchers.