How to Save Money on Your Tax Returns

Minimise your income tax

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None of us look forward to the time of year when we have to file our tax returns. But file them we must. So it’s best that we do all we can to save money when it comes filing your returns. The problem is that most Americans don’t know how to save money on their tax returns. The legal code is so complicated that a lot of businesses and people are missing out. The following is designed to help you save money on your taxes. Here are some ideas you might have missed.

Don’t Forget Your Deductibles

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Many people do not realize that there are a lot of deductibles hidden in the tax code. More often than not, these deductibles are forgotten, and you end up overpaying on your taxes. One deductible that’s frequently overlooked is job search costs. If you’re looking for a job while working, you can deduct these as expenses. There are some rules around this. For instance, you can’t claim money back if you are looking for a job for the first time. But it’s a deductible that is frequently forgotten.

Many people also forget that they can deduct the depreciation of their home computer if they use it for work. The same holds for their mobile phone, so long as your employer requires it.

File Digitally

Many people and businesses are still going through the hassle of filing their returns by hand. This takes up time and is a slow process. But now it’s possible to file digitally, thanks to software like 1099 software ETC. This speeds up the process, saving you both time and money.

Fund A Retirement Plan

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Another option for reducing the amount of tax you owe is to put more money into your retirement plan. Money placed in retirement accounts is sometimes eligible for deductions, but only if you are an active participant.

Business owners can also start their own retirement plans. Last year, it was possible for companies to save up to $53,000 in tax through retirement deductibles.

Make Sure The IRS Has The Right Address

The business world today might be software driven. But even though it’s 2016, the IRS is still using paper to communicate with taxpayers. That means that it’s crucial that they have the correct address. All too often people miss out on tax refunds because their refunds get sent to the wrong address. So it’s worth taking some time to make sure that the IRS has the right address for you.

Collect All Your Tax-Related Documents

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Filing your taxes can be very complicated, especially if you don’t have your documentation to hand. Fortunately, it’s a problem that’s easily solved. Collect up all receipts, donations, educational expenses together. Then pass all these receipts over to the person preparing your taxes. This will make their job a lot easier and reduce the amount that you have to pay in fees. You can keep all your tax-related documentation together in a file or folder. Or you can upload all your documentation online and keep it safe in the cloud. Either way, you ultimately end up saving both time and money.

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