You may wish to avoid paying your taxes, but these contribute to the nation’s betterment. The taxes you pay are utilized for critical social needs as education and social programs, national defense and other areas that impact your daily life. However, given the need and necessity of paying the taxes, there are some viable options that enable you to save on the taxes.
Listed below are some of the ways you can adopt to save on taxes.
1.) Retirement fund
You can contribute to the retirement fund that may be operational in your office to save some money that will otherwise go to the income tax. Your contribution to the retirement fund will be deducted from your gross pay.
As your gross pay is reduced, the same will have a bearing on the overall income tax you need to pay. The overall contribution one can make to the retirement fund will vary each year, as your gross pay will go up, thus, helping you save more for the future and save on taxes too.
2.) Making a catch up contribution
As you near 50 years of your life, you can make a catch up contribution to the retirement fund operational in your work establishment. The catch up contribution will help you reduce your pre tax gross income. This essentially means that you pay less tax.
3.) Do some charity
You may have not thought of this aspect, but making charitable donations also help you save on taxes, as these are deductible services and allow one to save tax. A number of charitable organizations with national and international bases are operational and you can make a one time or regular contribution to any of these. Ensure that you get a receipt for any kind of donations you make and you can save on taxes and contribute to the betterment of the less privileged at the same time.
4.) Invest in a flexible spending plan Ensure your participation in the flexible spending plan that your establishment might be offering. In case you are paying for the expenses that you incur on your child or have any unavoidable medical expenses, the receipts can be submitted in a flexible spending account that is operational for taking care of medical expenses in your establishment.
The amount for the same will be deducted from your gross pay before your taxes are deducted. This ensures that the overall taxable amount is reduced. Thus, you will be able to save money on your income taxes.
5.) Invest in solar power home improvement
You can invest in solar power home improvement plans. Homeowners are entitled to invest in energy efficient home improvement appliances and certain solar equipment and be eligible for tax credits. You will not only be saving some valuable money, but will also contribute to the betterment of the environment.
6.) Open a provident fund account
If you wish to save some additional amount for the future besides the regular employer sponsored retirement fund, you can consider opening a provident fund account with any of the nationalized banks. Provident fund savings are entitled as tax saving schemes and you can save a fortune by investing in them.
Follow the above listed measures and save your tax money.