Being aware of your tax situation is important. Have you figured out how much tax you are due? If you’ve gotten a major raise or have side income you could find yourself owing taxes at the end of the year! On top of that you may very well be responsible for penalties for under payment!

If you’re worried about the amount of tax you may owe; which is common if you have side income or sold property or investments. It’s time to start looking for deductions. Everyone gets a personal deduction from the government to help them out. You can also write off many other things you may not be aware of. These include things like mortgage interest, property taxes, qualified business expenses, and losses.

Losses include things not typically covered by insurance that you had to pay out of pocket for. This can be medical expenses you paid for or losses due to fire or disaster. Remember that if the insurance company paid for these charges.. don’t try to write them off.

Using a  free tax calculator can give you a breakdown for monthly, weekly, and even the entire year’s salary. Using this you can see if you’re paying enough taxes to cover yourself. Your employer should be able to provide you with paperwork to either raise or lower your deductions. If you ordinarily get a very large deduction you may think about lowering the amount of money you have automatically taken out of your check.

This is basically giving an interest free loan to the government. If you think you could make better use of this money on the day to day by all means take it back! It’s your money. Don’t over do it though. Make sure you calculate appropriately and leave enough for all your taxes.

Even if you’re fairly sure you’ll have a lot of deductions you shouldn’t count your chickens before they’re hatched. Things may come up or you may not be able to write off everything you think you should. Though, deductions are by far the best way to lower your total taxable income and lower your tax burden.

Originally posted 2011-12-30 23:06:44. Republished by Blog Post Promoter