Ten Ways To Lower Your Income Taxes

Some people get hit hard every year after they file their taxes. Most of these people are families. Single people who live in apartments rather than homes and work for an employer rather than for themselves. But we can help you lower your income taxes, follow these steps and you are certain to save even if it is just a bit.

Number 1: Make a tax strategy, the best time to do this is after Christmas. If you can think of any ways during this time to help you lower the income tax bill without lowering your income then this is the time to do it.

Number 2: Always keep great records. Keep a book or a spreadsheet with your deductions. Keep all of your tax related expenses in this book. Get an accordion file and keep your receipts organized so at the end of the year when you are ready to file your taxes, any deductions you can come up with from the receipts you will have access to.

Number 3: If you qualify, take advantage of any Child Care Credit or any Child Deductions. You will find a spot for these on the IRS published tax forms. If your child is in daycare and both parents work, you may be eligible for a tax break if you qualify.

Number 4: If you are self employed and you have children, the government allows you to pay your children and it is tax deductible. They can earn approximately $ 5000 without having to pay taxes themselves.

Number 5: Most people dont do this but you may want to be honest about how many deductions you are claiming on your W4. There are many people who claim 6 when they have only 3 deductions. The more you claim the more income you get at the time but you end up paying at the end of the year. Try claiming the right amount.

Number 6: Take advantage of any and all tax credits you can. Aside from the child care credit, there are healthcare deductions if you have a child with disabilities. There are education deductions, the best tax credits are the education tax credit and adoption credits. If you adopt a child or become a foster parent you will be entitles to a tax break.

Number 7: Increase your donation size, the more charities you donate to the more deductions you will receive. Such as Red Cross or maybe making a donation to Hurricane relief funds.

Number 8: There are some medical costs are tax deductible. Self improvement is a way to lower your tax bills. If you qualify for such programs as prescribed weight loss or stop smoking classes can save you money. Check into it, you may be surprised.

Number 9: For home owners, taking out a home equity loan can reduce your income taxes. If you borrowed money or even financed you can get a deduction from your origination fees and discount points.

Number 10: If you drive your car for your business then the IRS offers a discount for mileage. The standard deduction used to be 40.5 cents and now it is 44.5 cents. Keep your receipts.