Category Archives: tax brackets

How to Reduce Taxes

As working people ascend to higher levels of success, they will inevitably wish to maintain their financial earnings. This can be particularly challenging when tax season comes around. For this reason, many hardworking individuals are constantly seeking out various means of reducing their taxes and holding onto the money which they have rightfully earned.

Thankfully, there are a host of legal means which people can employ as they work to decrease their tax bills. The following options and tools may not have been readily available to them in the past. However, this knowledge and information will certainly prove to be beneficial in current and future times.

Look into Write-Offs and Deductibles

One of the easiest and most simplistic ways for people to reduce their taxes is by writing off expenses which qualify as deductibles, explains Entrepreneur. The majority of expenses which qualify as deductibles are generally professional expenses or closely related fees. Transportation, royalties, payroll fees, and other costs can be written off during tax season. However, applicable deductibles will vary from person to person, seeing as no two individuals have the exact same situation.

Not all expenses are deductible and, as a matter of fact, attempting to write off certain fees can actually garner legal trouble, affirms Cleveland 19. There are different ways to write off certain expenses and various situations which qualify. For the average individual who lacks familiarity with tax laws, this can be quite nuanced and complicated. Therefore, many people contract the services of accountants and tax specialists.

Delay Certain Payments

Another clever (and legal) way of lessening your taxes is by simply “deferring” certain payments, as stated by Kiplinger. Waiting until the new year to cash certain checks, billing clients towards the end of December, and delaying certain dividends can come in handy.

Individuals who are unsure of how to delay certain payments can consult financial advisors for advice which specifically tailors to their present situations.

Save Money for Retirement

Time affirms that individuals who put funds aside towards their retirement are able to qualify for what is known as a 401K “pre-tax.” In essence, putting aside money for this form of retirement allows people to withdraw the number of saved funds from what is considered as taxable income. Moreover, taxpayers are permitted to subtract a maximum of $5000 worth of funds within a traditional IRA.

To make a long story short, saving money for retirement really pays off when tax season rolls around.

A Final Word

Taking advantage of all legal means to reduce owed taxes is absolutely paramount. Many individuals may be shocked to learn just how many deductibles they can write off. Delaying certain payments and putting aside money into 401K and IRA accounts also wields significant payoffs. In some of the best case scenarios, hard-working people have been able to save so many funds in taxes that the government ultimately wound up owing them money!

 

Authored by Gabrielle Seunagal

Money Saving Tax Tips For Canadians 2015-16

Canadian Tax

Are you ready to make the most out of your tax savings?  Though it might be late to be filling, for those Canadians who requested an extension on their taxes, these strategies and tax savings will prove to be more than beneficial.  We’re sure those who are self employed will find many ways to take advantage of these here too! Canadians who can, should claim as many tax deductions and credits as possible.  This will then potentially lower their tax burden at the end of the year.  Furthermore, the end goal is to make certain to avoid all the common misunderstandings, pitfalls and the limitlessness misinformation that does exist.  We will dispel some of this for you right here!

Now, before we actually start listing some of these tips, we want to point out a very important issue with financial gifts or benefits gained on your job.  Some Canadians believe these don’t have to be claimed, as they think they are non taxable.  Modest gifts from your employer might be okay to not claim, but if you’re receiving end of year bonuses that are above $500–and this is every year; these kinds of things have to be claimed.  If it was something like every 3 to 5 years, then you could get away with it.  Unfortunately, the CRA will pick up on discrepancies through audits and by other regulations.

Let’s take the time to look at some of the things you should do and some of those you shouldn’t do when it comes to your taxes and gaining those precious tax advantages!

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2016 Tax Season Tips To Make Finances Easier At The End Of The Year

1)  Don’t be afraid to accept a pay raise or another form of promotion

Just because you receive a pay raise or a promotion doesn’t necessarily mean you’ll be in a new tax bracket and have to pay more out in taxes at the end of the year.  In fact, the opposite might be true.  Too many Canadians are losing out on tax benefits by not accepting promotions and raises versus any truth to the latter.  Be proud of your work and your position and accept what you’ve earned!

2)  The CRA DOES reward honesty, so don’t hesitate to point out who might not be paying taxes the way they should

Reliable tips that the CRA receives do profit for some Canadians.  It was just a few years ago that the Canadian Revenue Agency put rewards in place for those who would report on others not properly paying taxes and such.  While it might feel like a snitch position–think about how it can keep you safeguarded when it comes down to auditing and other investigations!  Honesty really does pay off.

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3)  You can file your taxes online without paying more

So many Canadians believe that filing taxes online can lead to unexplained penalties and other unnecessary costs, but this isn’t true.  As long as you’re familiar with how to file taxes and if you have the similar earnings year after year, filing online can save you time and money.  The earlier you can get your taxes taken care of the better!

There are definitely more tax myths out here that intimidate and scare people for no reason.  Filing your taxes might take time, but it’s a necessary evil.  Knowing the facts about the CRA and how it all works makes everything even simpler.  With further investigation and educating, you’ll learn more tips and strategies that might be perfect for you!  If you haven’t filed yet, don’t wait to get that extension approval!