Simple Tips To Help You Save On Taxes At Work

If you want to reduce the amount of tax you pay, you should let your employer cover some of your expenses.

By simply allowing your employer to cover your expenses with pre-tax dollars, you will be able to save hundreds and sometimes even thousands of dollars annually.

The best way to save on taxes.

Make arrangements with your employer to pay for some of your expenses every month. Ask you employer to pay for an expense straight up. Any employer will do this because, a) Its a wonderful thing to do, and b) The expense will be a deductible expense which can be deducted when calculating taxes.
CaseĀ  Study
Pretax Expenses

Assuming your income tax bracket is 25 percent and you pay a monthly rail pass of 100 dollars out of your after tax dollars. This means that your income was 133.33 dollars but 33.33 dollars was deducted as taxes before you could put your hands on it and the remaining 100 dollars is what you withdrew from the bank account for your monthly rail pass.

If you asked your employer to pay for your monthly rail pass using pretax dollars, only 100 dollars of your income will be used. This means that you will save 33.33 dollars every month or 400 dollars annually.

All you have to do to save on taxes is to identify expenses that your employer can pay for you using pretax dollars and contact human resources to see how the company can help you.

Unusual Tax Deductions You Should Not Claim

More and more people are filing their tax returns with turbo tax and other software so they can try tricking the system. I have never been a person to take a chance as far as tax deductions are concerned. However, some people will gladly take the risk boldly going where most of us would only dare.

The Minnesota Society of Certified Accountants has compiled a list of odd tax deductions according to a survey given to its members. Of course, these were thwarted by their accountants.

Chairwoman Sara Portner says there is a high profitability they would get sent an angry letter from the IRS if a professional had not interfered. If they use turbo tax, the software can not distinguish unusual tax deductions.

Children may get on your nerves but that is off-set by the tax deduction you can claim each year. The deduction can not be claimed for the year unless they are actually born. One woman thought she could claim an unborn baby during the times she was expecting although she put the child up for adoption. Another client thought he should be able to claim a city official because they the salaries.

Someone tried to claim a former spouse.You cannot claim a spouse even if they are not working. According to turbo tax, you may get an exemption that is equal to the you would get for a dependent. Do not try to increase charitable donations. One person believed you could use donated blood as a deduction. Keep in mind you may get audited by the IRS if they are suspicious of your tax deductions.