Tips To Help Save On Your Taxes

by Pam on May 28, 2015

taxesThere are two sureties of life – death, and taxes. Neither can be avoided,  but at least the pain can be alleviated. In the case of taxes, the effects can actually be reduced. Everybody wants to be able to save a little money but if taxes are unavoidable, how can you save money on them?

For a start, getting your tax returns in on time can help you avoid a nice fine from HMRC but else can you do to keep everyone happy and come away with some change?

Check your tax code

Your tax code may change from year to year, so make sure you check it. Using the wrong tax code can mean that you end up paying more tax than you should, so this is something worth keeping an eye on.

If you are not sure of what your tax code actually is, you can find it on your payslip. Take a look at the Which? tax calculator to see how much you should be paying.

Payments on account

Being self employed isn’t always the bed of roses that many people mistakenly believe. If you think that you may earn less this year, than you did in the last then you can apply to reduce payments that are on your account.  this should help make spreading the cost that little bit easier.

Property based tax free income

In the states there may be firms like Reliance Tax Loans to help, here in the U.K. you could take in a lodger! You could offset your other bills, including your mortgage by charging rent. By opting into the rent a room relief, you could earn up to £4,250 tax free in rent.

To up your pension

Let’s say you earn around 40k in a year, being self employed. You could take 1k of that and put it toward your pension. The up shot of this is that ‘only’ 39k is counted as taxable, and would save you somewhere in the region of £200 a year in tax.

Don’t even pay your tax

Wait, what? If that sounds like it could be all sorts of flavours of illegal, don’t panic. so called ‘housewives’ and children, should not be paying tax on their savings (usually). Ask your bank or building society if you or your children qualify, and if you earn less than £9,440 then it will almost certainly be a yes.

Finally, don’t forget your expenses

It costs to run a business, and it can cost a lot. There are certain things that you need to pay for in order to run your business, and you can deduct these from your tax return. Even if you think you don’t, there is always something that you need to pay out for.

Gas, electricity, petrol, internets access, telephone line rental… There are many more things that we pay for, and these can all be deducted. Of course, there are rules so it is worth checking up on to make sure that you don’t get a nasty surprise later down the line.

There are lots of ways that you can save money with regards to your outgoings. Hopefully these tips can help you save a little more.

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{ 2 comments… read them below or add one }

Golden Grandinetti May 30, 2015 at 12:50 am

Personally, I do not know much about taxes. My mother had cancer and passed away. We had three cancer polices. Do I have to pay taxes on money received from the cancer insurance ?

Pam May 30, 2015 at 10:07 pm

That will depend on what country you live in. I would recommend that you speak to a tax specialist/accountant in your region to confirm.

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