Filing your taxes is one of the least favorite activities of any law-abiding citizen. Especially since the government agencies do very little to help you file your taxes compared to other countries such as Canada, where taxes are automatically calculated so that you don’t overpay or underpay them.
While many citizens in western countries might find this task tedious, there’s one thing that we can all agree on, no one wants to pay more than they owe, and some of us want to boost their tax refunds. Numerous strategies can be implemented to save your money; these strategies are the tried-and-true ways to reduce your taxes.
Increase Your Workplace Savings
Make your future self happy by increasing your contributions to your personal pension plan at work.
This year’s policy allows employees to contribute to their personal pension plan a percentage of their salary. Now, keep in mind that this policy might change as it often does, so take advantage of it while you can.
The more that you contribute to your personal pension plan account ensures that you cut costs on your tax bill and ensure that your retirement is as cozy as it can be. The money you contribute to the personal pension plan is excluded from your taxable income and saves you money.
However, the more you contribute to the personal pension plan, the less money you take home with you. Keep this in mind whenever you want to increase or decrease your contributions.
Consult with a tax filing firm
When it comes to saving money from tax returns, information is your best friend. If you’re not quite sure about what you have to do, you might want to consider consulting with a capital allowance company. A tax consulting firm can give you sound advice when it comes to taxes. Not only will this simplify the complex topics of taxes, but this can increase your business’s savings in the long-term.
Take Advantage of Tax Deductions
Many tax deduction schemes exist that you may not know of, and several of these tax deduction schemes can easily be overlooked by the uninitiated. The tax deductions that you qualify for can positively impact how much you save on taxes.
- Child and dependent care — You can use up to 6,000 dollars of qualifying expenses for the Child and Dependent Care Tax Credit. These expenses can include child daycare services, etc. Make sure to contact your IRS office to make sure that this tax deduction scheme covers you.
- State sales tax — On your tax return, you can choose to deduct the state and local general sales or the state and local income tax that you paid during the year. Keep in mind that you can’t have both deductions.
- Charity miles — This one is a bit complicated and involves a lot of computations to get the exact number. This scheme is fully deductible at 14 cents per mile that you’ve traveled to help with charity work or any charitable related activities. This might not seem much, but if you travel a lot to help with a charity, this cost can significantly reduce your taxes and save you money.
Collect Your Tax Credits
Tax credits can reduce your tax bill on a dollar-for-dollar scheme. That is why people consider tax credits as one of the most valuable tools to use when trying to save money on taxes. This tax scheme can also be useful for taxpayers with low to moderate incomes.
Now that the new year is fast approaching, it might be worthwhile to file your taxes early and get ahead of it. Trying to save money on your taxes is the first step you can take to take charge of your financial life.