Packed lunch, Henry's Lunch 1-14-10—Kelly Sue (Flickr.com)
Before you hire a personal accountant to balance your books, think of all the practical things you can do to avoid taxes from piling up and wreaking havoc on your finances. Some of them are no-brainers, and some require a bit of research. The important thing, though, is to do something…and do it now.
Pack a lunch instead of ordering or eating out. Don’t want those value-added taxes and service charges ruining what’s supposed to be a yummy meal? Well, do what you did back in elementary school—pack a lunch! Not only will you get the kind of meal you want (and if you’re vegetarian, there’s less chance of becoming vexed, explaining that fish is not vegetarian food), but you’ll also save up on hidden taxes that normally come with restaurant or takeaway food.
Take advantage of the office car pool. If you office provides a company car, take advantage of it during business trips to save up on your own gas and car maintenance. You can also ride the company car with your workmates if you live in the same area, so you can cut down on the expenses and hassle of everyday commute and traffic.
Compile your tax deductible expenses. Self-employed people can claim tax-deductible expenses, including purchases for office supplies, gas, travel, and in some cases, even meals. Don’t throw out those receipts. You’ll need them the next time you file for tax.
Consider working from home. Not only will you save up on gas, commute money, and maintaining an office, but setting up a home office could mean writing it off when filing for taxes. It’s a bit tricky, though, because one of the requirements would be to really have a home office, not just a corner of the house where everyone in the family has access to it. You have to determine the percentage which your office takes up from your entire home, then determine the mortgage percentage it eats up, plus utilities and maintenance. That’s when you can come up with your tax deduction.
Get tax credits for any renewable source of energy. If you installed solar panels to help heat your swimming pool, or put up path lights that run on solar energy, then you can gain tax credits for them. This “green” devices that make use of sun and wind to power them can give you the kind of tax credits that reduce your tax bill dollar for dollar. Talk to your local tax man about installing or using any kind of device, appliance, or gadget which makes use of renewable resources within the year to see if they are in the eligibility list, and if they qualify for full tax credit.
