Tax Season may be over for the time being, but now is the time to start planning for next year. It is never too early to find new ways to save big bucks on your tax bill.
1. Mileage – you can claim mileage on everything from volunteer work to doctor’s appointments. Keep a notebook for those times when you are making specific trips and write down your mileage at the beginning and end of the trip and also the purpose of your trip. Your tax preparer will help you determine which trips you can use and what rate the IRS will allow for that mileage.
2. Hobbies – Make your hobby into an entrepreneurial endeavor if possible. You will be able to write off many of the expenses (and it will come out of your income amount before taxes are appraised). All you need to do is sale a few blankets, flowers or guide trips and you will be on your way to saving more money your tax bill.
3. Children – Employ your children in your business ventures. You can deduct their pay from your profits and you can pay them as much as you want. One lawyer I knew paid his daughter $50 per hour – she got $6 and the rest went into a savings account. By the time she graduated from high school there was enough to pay for college.
There are a number of legitimate ways to bring your tax bill now. Take some time to look over the rules and regulations and to sit down with a financial professional to see where you are paying out more than you have to pay.