5 Tax Saving Tips To Put
More Money In Your Pocket

tax saving tips

We often look for tax saving tips when it's time to file our tax return. But after the year is over, it's too late to take advantage of any free tax help that you could have put to use during the year.

Learn now to save now.

You know the saying:

The only things certain in life are death and taxes.

It doesn't make sense to wait until the end to save your life. So why only wait until the end of the year to save taxes when you can possibly save all year long? Learn these 5 simple tax saving tips so you can save throughout the year. Come on, Uncle Sam can wait.

Tax Saving Tips

  • Mind your own business. I took that line from Robert Kiyosaki, author of Rich Dad Poor Dad. If you generate income, or want to, through business activities, create a legal entity like a Limited Liability Corporation (LLC), S Corp, etc.

    Having a business not only helps you protect your assets, it allows you to take tax deductions on business related expenses. Our website is owned by our LLC. It allows us to write off business related expenses like Internet charges, meals, and even coaching programs.

    Keep all business related receipts like meals, transportation, and cell phone bills.

    These tax write offs help you out so much. If you are going to eat, and discuss business, there's no reason to not deduct this expense as a business expense. Take advantage of all of your opportunities!

    Even when we experienced a capital losses with real estate, we are able to take these tax write offs using our LLC.

  • Change your W-4 deductions. Of all the tax saving tips, this one may be the most overlooked. So many people love getting that big tax refund in April. But, have you ever thought about what income tax refunds really are? You are receiving a refund because you overpaid taxes during the year!

    Think about it this way. You gave Uncle Sam a loan. You gave it to him interest free. And, you incur lost opportunity cost since you give up the possibility to invest it to earn you more money. Now, how does that make you feel?

    Here's what you do. Take your W-4 to your tax strategist or accountant. Take every deduction that you can so it increases your monthly cash flow. I aim to take enough deductions to where we owe nothing at the end of the year.

    Now, take that increased cash flow and make it productive. Put it into an ING savings account. Learn to invest money. Or, simply build your emergency fund.

  • Save taxes, not defer them. There is a huge difference between saving taxes and deferring them.

    One of the tax saving tips I often hear from people is to max out your tax deferred investment plans. This is a fallacy. 401k retirement plans are tax deferred investments. This means you put off paying taxes. You will eventually pay your taxes at the end.

    Ask people if they think taxes will go up or down in the future. I say UP.

    We intend on raising our income level every year, and would rather pay the taxes now at a lower tax bracket than later when it is higher. I often hear the argument, "But when you retire, you'll be in a lower bracket." That's a whole different discussion.

  • Don't trash, give. Donate your stuff and cash. You can donate your clothes, household items, cars, and even property. With property donations, you can deduct the full market value of the property. That could be a huge break to take.

    You can also give money to your favorite charity or to your church. Be sure to save all your charitable donation receipts as proof of your contribution. These are all tax deductions you can take at the end of the year.

    Once again, you have to opportunity to help and save at the same time.

  • Itemize whenever you can. There are so many ways to itemize your deductions rather than taking the standard deduction.

    If you could deduct more, do your homework so you can save yourself taxes paid out to the government. For more free tax help, go to this website to see if you can save yourself even more money with additional tax write offs - http://www.irs.gov/taxtopics/tc500.html.

    If you aren't itemizing, you may have additional free online tax filing options. And if you are on a budget, free tax software is available online as well.

Paying taxes is never fun. But knowing you're saving throughout and at the end of the year can make it less painful. Thwart this eroding factor of money by learning this practical way to save money.

Learn these tax saving tips to give yourself the greatest advantage. Death may be certain, but paying too much in taxes doesn't have to be.

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