The holidays got the best of me but here I am right on time because we all know, as soon as the ball drops, it's time to start getting those deductions and tax plans in order!
We had Free Money Part 1 and Free Money Part 2. Here are the final two tips:
#10 - The best way to save tax dollars is to reduce your income before you pay taxes. So how about getting a miscellaneous fringe benefit from your employer instead of cash? Often an employee wants that green stuff that they often miss the bigger picture.
Not sure what I'm trying to say? Let me explain: You get your paycheck after paying all of your taxes or so to get to work every day you must ride a bus so you buy a pass for $120 dollars a month. Now instead of that let's have your employer give you a discount fare card up to $120 a month. This is considered a de minimis fringe benefit plan (it's tax free) so not only do you get this for free but it does not show up as income so you are keeping more of your paycheck in your pocket.
#11 - Free Money isn’t always about what you can get for yourself but what you can give to someone else and in return you pay less in taxes therefore you put more money in your pocket. Gifts, Bequests and inheritances do not constitute taxable income but any money you earn from that money is taxable so one way to reduce those taxes is to give some of those earnings to a charity then that will reduce your income and your taxes. Sometimes to give you actual get and this is one of those times. This is also a great way for anyone that itemizes to reduce their taxes. Just be sure you document what you're giving and if you are using an IRA or some other retirement account have them send the check directly to the organization then you avoid taxes on those distributions.
I do encourage you to always check with your tax planner to be sure you are keeping all or as much as you can of your hard earned money.
Have a safe, happy new year, and I hope this helps you with reducing your taxes for 2009!
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