3 Useful Tax Saving Tips For Families

For sure, every tax payer is looking for helpful tax saving tips. The burden of paying tax has taken its toll among honest tax payers given the great amount of taxes that are being paid every year. And of course, tax saving tips are much more needed in these times when every price seems to rise. Tax saving tips are very much helpful for families who are limited by the income that the breadwinner has. Enumerated below are some expenses which we did not realize to be tax deductible.

1. Child Care—This is considered as one of the effective means of tax saving. There are basically two ways in doing so. The first one is through a spending account that is flexible. With these kinds of accounts which are employer-sponsored, you will be able to contribute to your child care expenses on a pre-tax set-up. This is known to reduce an individual’s taxable income for the current year. Meanwhile, the second means of reducing your taxes is claiming your child care expenses at the end of the year. Of course, expenses in day cares are counted and even summer camps attended by kids. Summer camps are counted, but many parents do not know this. The summer camps are counted for as long as the main reason was that you had a work or schooling so you let your kid attend the camp. The fees you shelled out in these camps is actually deductible to the tax that you have to pay.

2. Health Care—Along with child care expenses and health care expenses could actually save you from paying a great amount of tax. Just like the child care expenses that you may have, this could be paid on a pre-tax basis or could also be deducted at the end of each year. Just bear in mind that you have to keep track of your health care expenses for the entire year including those over the counter medicines if you are planning to deduct the expenses at the end of the year. Meanwhile, if you opted for a flexible spending account, consider these expenses and have a reimbursement.

3. Know the code—Laws that govern taxes changes from time to time. You should be familiar with all of the changes since every year, there may be some new deductions which your family could enjoy and benefit from. If you do not have the luxury of time in reviewing the tax code changes annually, have your taxes be prepared by professionals. The professional you hired will be informed on the changes and could even find some tax saving tips that you do not want to miss.

Ask your financial planner to look for effective tax saving tips that would benefit your family. There are a lot of ways just waiting to be revealed.

Abhishek Agarwal