Ten Strategies to Cut Your Tax Bill 1.Make your January payment in December. That way, you can deduct the additional month's interest. Your January payment is for the use of the money in December, and the interest can be deducted if paid and mailed prior to January 1st. 2.Defer Income. Tax rates are decreasing. Collect your bonus in 2007 rather than 2006. If you're self-employed, try to hold off your billing in December so your income checks come in January. This will carry your income over to the next year. 3.Accelerate expenses. Prepay your tax preparer with a check before December 31st for the return he prepares in the next year. Prepay your Keogh or IRA fee or any other investments expenses. 4.Pay your fourth-quarter real estate taxes before December 31st. Fourth-quarter taxes are due February 1st. If you pay your fourth-quarter tax before December 31st, you will be able to deduct that tax payment one year earlier. 5.Remaining money in your Salary Reduction Plan. These plans are called flexible spending accounts. These accounts require you to reduce your salary by a given amount that goes into a fund that can pay certain benefits, such as medical expenses and dependent care expenses. If you don't use it, you will lose it. If you have money in this account, spend it! Prepay orthodontia or buy that second pair of glasses, etc. 6.Make charitable contributions. You can make a contribution with cash or charge it on your credit card. Other contributions can include donation of clothes, furniture, or equipment. Make sure to always get a receipt for every contribution you make. 7.Pay estimated state income taxes by December 31st. State taxes are due around January 15th. By paying them by December 31st, you get to deduct the taxes a year earlier. 8.Recognize any capitol losses. Sell non-performing stocks before December 31st. Any losses offset your capital gains first, and the next $3000 of losses can offset ordinary income. Any excess losses are carried forward into your next year. 9.Get married'or divorced. If your marital status is determined as of December 31st, you may qualify for a marriage bonus. If you plan to divorce, make sure it's done legally and before the end of the year. This may qualify you for some tax savings. 10.Open a Keogh account if you're self-employed. You can contribute as much as 20% of your net Schedule C income into a Keogh tax-deferred retirement plan, and your contribution is deductible.
1. Always try to make full use of your capital gains allowance that you are entitled to each year.
2. Ensure that you send in your tax return in before the deadline each year in order to avoid receiving a fine for filing your return late.
3. You can save 10 pounds off your tax bill by filling in your tax return online.
4. If you are a non tax payer then make sure that you complete a form at your bank or building society so that you do not pay tax on the interest on your savings.
5. If you are married, then make sure that any income you receive from investments is paid to the partner that pays the least tax.
6. Always check any calculation made by the tax man or any tax code given to you as they can make mistakes.
7. Always keep your tax records in a secure place, up to date and in good order as it is possible to get fined by the taxman for not keeping tax records.
8. When choosing your company car, go for a car with low carbon emissions as the amount of company car tax you pay is based on its carbon emissions.
9. Try to take full advantage of the tax incentives given for taking out a pension.
10. In order to reduce inheritance tax liability on your estate in the future, you could make some gifts whilst you are alive to the people you wish to inherit that money.
11. You could arrange to make a will which can be used to reduce tax on your estate and make things easier and clearer for everyone when dealing with your estate.
12. If you are a taxpayer then a good idea is to make full use of tax free savings schemes such as ISA schemes.
13. If you would like to give to charity then you can ensure that the tax goes to charity by using Gift Aid.
14. If you find that you are paying too much tax on account, you can request to pay less on account through the taxman.
Well that is all the tax saving tips I have for you in this article and if you try to do some or all of these things it will be worth the effort as you will be able to save a worthwhile amount of tax in the future.
Both Jgsketch & Miguel Poza are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Jgsketch has sinced written about articles on various topics from tax. John Gormley is CEO of Consumer Credit Management Services, a Non-Profit Organization. Since 1991 CCMS has helped thousands of families and individuals res. Jgsketch's top article generates over 880 views. to your Favourites.
Miguel Poza has sinced written about articles on various topics from Health Insurance, Firewall and tax. Miguel Poza runs a website about personal finance and saving money where you can findout about many free money saving tips and read other money related articles which willhelp you sort out your finances. You can check it out at. Miguel Poza's top article generates over 27100 views. to your Favourites.