Saving on tax payments is one of the top financial objectives on everyone’s agenda. Every financial year we have to give away a portion of our earnings and that cannot be avoided. But it is possible to reduce the amounts of tax one has to pay. Many individuals across the United States are able to save their precious dollars by using some legal tactics. Renowned financial consultant Justin Urbas has some key tax saving tips for individuals and small businesses. Let us have a look:
Tried and Tested Methods of Saving Taxes
Launch a business – If you are keen on gaining tax benefits you can think about launching a new business this financial year. As a business owner, you will get a bit of leg room in regards to tax payment deadlines. Costs that are incurred in order to run a small business can be pushed onto the expenses category, and are subject to tax breaks and exemptions. Many US residents who own businesses enjoy significant benefits every financial year.
Make donations – This is another way of assured tax saving that many people incorporate from time to time. Making donations might be your wish if you believe in, and want to support any cause that is dear to you. If you make donations and can produce documented proof when the time to file returns comes near, you will witness a reduced tax bill.
Invest in property – If you were pondering over the purchase of a new property, maybe now is the right time. New property owners have to pay mortgages. The interests in mortgages are generally tax deductible and can save you a lot of precious dollars. The tax benefits of property purchases can be experienced during all the years you are making house payments.
Hold off paying that student loan – It is advisable not to make student loan payments at once, and you should prolong the payments for as long as possible. Interest payments can be deducted from your adjusted gross income, thus helping you save taxes. Many undergraduate and graduate students use this technique to reduce tax payments.
Check tax credits eligibility – Without your realization, you might be actually be subject to tax credits. If you are new parents, or are spending on education, or have energy efficient electrical in your home, you might be subject to significant tax credits. This is a great way of reducing tax payments when April comes.
Income splitting – A credible way of saving taxes is splitting taxes which many people gain from today. You can transfer a portion of your income to your offspring, who is possibly in a lower income bracket. Although there are some restrictions to this method, it is effective to a certain extent.
Invest in retirement – If you still have not started, maybe it’s time to think about investing in a 401k or IRA retirement scheme. Deductions should be made from your adjusted gross income in order to save the tax dollars. While you might be taking home slightly lesser amounts, your money is secured for a better future.
If you are interested in proactively reducing your tax payments, following the above mentioned tactics might be of help If you need advice regarding this, getting in touch with an experienced financial consultant is the best option.