Most people dread tax period as it involves lots of paperwork and exploring their financial habits. Yet, everyone wants to know how to save money on taxes. While it’s quite impossible to eliminate tax completely, there are ways you can reduce the payable amount.
- Follow the Trend – Go Green
Everyone seems to be going green. The fact is, however, it saves more money than it conserves the earth. Along with cutting down on your electricity bills, reducing the usage of home energy can help you save money on taxes, under Energy Policy Act. You can log on to energystar.gov to know if you qualify for such deduction.
- Save on Medical bills
If you have saved the receipts of all your medical expenses, you don’t have to bother much about how to save money on taxes. Almost every medical expense like buying prescription drugs, hospitalization bills, medical insurance, visit to doctors, etc are deductible if you have the proof. To know the full list of expenses that are cover under this benefit, visit irs.gov.
- The Expense of Charity
Amount donated to recognized charitable trusts is deductible, and all of us are aware about it. You can, however, also deduct money spent on any other expenses that were related to the charity. For instance, traveling expenses paid to reach the charitable organization is also deductible.
- Are You Paying for Your Diploma?
Of course, we all pay for our diplomas. If you, however, have borrowed a student’s loan, the interest you pay every year is deductible from the taxable income.
- Advance Payment
Mortgage payments of this year are deductible. But if you opt to make next year’s payment in advance, i.e. in this year, you are eligible to deduct it from this year’s income.
- Something for First Time Employees
After graduating from college, you start seeking job actively. If you are offer a job out of your locality or state, or any place that requires relocating, all your moving expenses are deductible. So, have an expensive pack up, you now know how to save money on taxes.
- Save Money by Managing Your Money
Expenses, up to 2% of you yearly gross incomes, incurred to manage your funds are deductible. This would include expenses like paying for a safety box, communication with your broker, buying a tax preparation software, buying investment magazines, etc.