Learn Tax Planning Tips...
It is a very common habit for tax payers to wait until the first quarter of the year before remembering to keep any mailed tax documents from employers respectively. However, there are other personal tax preparation skills to inculcate in order to save more on taxes. Keeping a good documentation of charitable donations, approved home improvement expenses, home energy saving projects and depreciation on personal vehicle, especially when its driven between two jobs or used for personal business.
Other Tax Planning Tips:
- Keep records of all your tax related documents. Examples: health care form 1095, W-2, 1099 if you're self employed. Remember: all income over $600 must be reported to the Internal Revenue Service (IRS)
- Avoid paying taxes on capital gains by subscribing to income tax free investments
- Capital gains or losses: keep your IRS Schedule D
- U.S citizens or lawful permanent residents operating businesses oversees must report their business income - Income from Abroad is Taxable
- Charitable donations: keep receipts, pay with checks or credit cards, document miles driven
- Find out employee tax savings benefits from your work HR department such as pretax medical savings, health insurance, dependent care
- Health insurance policy is mandatory or pay penalty
- Student loan interest and qualified tuition paid are also tax deductible. Keep record of education expenses
- File back taxes. Do not compile but solve it now!
- eFile your tax returns timely