Secret Tax Tips

Save money at tax time with a few secret tips.

Everyone wants to save money at tax time -- or at least be sure they can afford to pay when required. One of the keys to achieving income relief is taking advantage of all your possible deductions and credits. You may have many more deductions than you realize that can save you a bit of cash or even move you to another income bracket to receive a bonus. Knowing a few little-known secret tax tips can make a significant difference in your return.

Employ Your Children

Give your kid a job and write off his salary.

Imagine the fun and interesting learning experience your child will have participating in the family business -- and making money doing it. Many business owners overlook the fact that their children are permitted by law to work in family-owned businesses and the salary you pay them is fully tax deductible.

Gift Taxes And Charitable Deductions

Give your family up to $13,000 without paying taxes on it.

Significant monetary gifts to children, family members or friends are subject to a gift tax. A little-known tax tip is that you can give gifts to your spouse without paying this tax. As of 2009, cash gifts over $13,000 are subject to taxing, but you can avoid this expense by splitting contributions with your spouse. Together you can contribute up to $26,000 and not pay taxes on it. You can give away multiple gifts of up to $13,000 to as many people as you want to without paying taxes on a single one. You are not required to pay taxes for any medical expenses or tuition paid on behalf of family members or contributions to political campaigns.

Marriage Tax Bonus

Newly wed? See if you're eligible for a marriage tax bonus.

Many tax payers are familiar with the federal marriage tax penalties that affect newly married couples filing jointly. What few are aware of is the fact that this penalty is often avoided dependent upon the difference of income between the spousal partners. Typically couples in higher income brackets with equal or comparable incomes will be subject to the penalty. If you and your spouse have considerably varied levels of income, once averaged the difference may reposition the higher earner into a lower bracket. If this applies to you, you may be eligible for a marriage tax bonus credit.

Delay Paying Your Taxes

Put off paying taxes on unpaid invoces.

If you're a self-employed independent contractor and you want to delay paying taxes on your current earnings you may be able put off at least some of your balance until the following year. If you have worked under contract during the current year but have not yet been paid you can wait to retain payment until after the first of the year. As long as you pay taxes on that income the following year it is perfectly legal.

Hidden Office Expenses

You can write off business-related ATM fees.

Most business owners and independent contractors know that office expenses such as computers, desks, chairs and file cabinets can be written off as tax deductions. But a little-known secret is that there are numerous other smaller expenses that fit in the same category. You can deduct any credit card fees, ATM fees, bank charges or interest that is incurred on your business accounts. You may also deduct all business-related trade publications, magazine subscriptions, books or newspapers you buy. You can deduct your business cards and even your cell phone bill if you use for phone for more than 50 percent of the time for business-related purposes.

Office Parties

Party with your staff and deduct all of the expense.

Business owners can deduct the costs of company office parties. Events like employee birthday parties, holiday parties, retirement parties or any occasion you see fit can be claimed as deductions. The only provision is that all company employees must be invited in order to qualify for this credit. If you are holding private business parties to entertain or network with clients or business partners you can deduct up to 50 percent of the expense.

References

• Webraydian: Ten Golden Tax Deduction Secrets
• TurboTax: Tax Calculators & Tips > Getting Married
• Evan Carmichael: Tax Tips for Independent Contractors and Self-Employed Individuals Who Need Income Tax Relief
• Bloomberg Businessweek: 25 Unsung Tax Deductions
• Finweb: Little Known IRS Gift Tax Secrets Revealed

Resources

• TaxTips4NetworkMarketers: Tax Strategies For Network Marketers
• Bloomberg Businessweek: Hidden Tax Tips for Entrepreneurs