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How To Save Money On Taxes 

There are only two inevitable certainties in life – death and taxes. It is therefore necessary for any working man or woman to know the different ways to save money on taxes because deductions from monthly income of career people becomes a burden and disappointment every payday as taxes poke a lot of holes in every pay check. That's why most of them resort to different methods of reducing income taxes so as to get the pay they work so hard for, and increase their savings in bank accounts.

It the quest to reduce taxes paid monthly or annually, however, it has to be remembered that only legal methods should only be the ones undertaken to increase salaries of career people. Resorting or performing illegal procedures such as tax evasion and falsification of documents might get them nowhere but troubles and more payments for police detaining or criminal cases hearings in courts.

Tax avoidance is the top and easiest method to do, as it does not violate any law and is subject to choices of consumers. However, if taxes can't be helped, here are some ways in which working girls and boys can get more of their income with lesser income taxes paid:

1. Save money on taxes by declaring more independents. Single career person can declare parents and siblings as dependents.

But tax payers with kids has a lot more advantage since more there is a particular amount of tax deduction for every child at a certain income amount level. In the United States for example, one thousand dollars is deducted from tax fees for every child under seventeen, as long as the parents' income does not exceed 110,000 dollars or 75,000 dollars for a single parent.

In the Philippines, ten thousand pesos is being deducted for every child for both married and single parents, if the annual gross income does not exceed 100,000 pesos.

2. Save money on taxes by paying more college costs. Parents sending their children to intermediate schools have more tax deductions up to four thousand dollars worth in tuition and other college fees. In America, married couples with AGI not exceeding 130,000 dollars and single parents having income not higher than 65,000 qualify for this particular kind of tax deduction.

However, tax payers can not avail of this credit in the same year for the same student.

3. Save money on taxes by donating or sponsoring a charity. Tax deductions can be a reward for donating old clothes and goods to charities and other organizations, as long as donors get a receipt. This way, tax payers are saving a lot of money, while helping their fellowmen.

4. Save money on taxes by declaring every medical expense. Some countries follow a law that medical expenses can only be deducted from taxes if they amount up to seventy five percent of the AGI. It would help, however, to itemize the purchase of prescription drugs and consultations as well as hospital confinements, as these can be of great help in saving money on taxes, especially in most countries.

5. Save money on taxes by paying mortgages early. Paying fees for house or car mortgage in the tax same tax-paying year can reduce a large amount of interest for the following year. Then, tightening belt this year can save more money next year.

 



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