Go on admit it, you’ve often contemplated what it would be like to keep most if not all of your paycheck instead of being fleeced by the Taxman. It doesn’t have to be just a daydream because there are many strategies and shelters for your hard earned money. Before you get sweaty palms and start looking over your shoulder to see if Big Brother was watching you read an article called Cheating the Taxman, understand it is only a figure of speech. I do NOT want you to cheat the Taxman. That is against the law and it is called Tax Evasion. What I’m talking about here is Tax Avoidance or Tax Deferment.
I know people who think that they are being better citizens by paying their full portion of their taxes. In my opinion this is both naïve and stupid. I’ve yet to meet anyone who has received a commendation from the government for sending them more than he or she had to. There are lots of tax shelters available to the public and our government put them there. It isn’t cheating the Taxman if you take advantage of a policy that was developed for your benefit. The wealthy in our country pay only what they’re required to pay and not a penny more. The poor or uninformed are constantly giving thousands of dollars in what amounts to be a donation to the Taxman.
If you have a home based business you can legitimately claim against your earnings from your regular job. By having a dedicated area for an office in your home you can claim a portion of the expenses that would go for such an office. This could include utilities, computer, internet, property taxes, mortgage or rent payments. If you use your vehicle you may be able to claim the portion of costs involved for your business. This could include loan or lease payments. By all means check with your accountant for all possible tax deductions.
Your children can also be useful in helping you hold on to your money. If you have the home-based business you can hire them as employees and claim against their wages. Obviously they have to be able to do work that is considered valuable to the business. You can also consider Registered Educational Savings Programs.
There are the good old stand-bys like Registered Retirement Savings Programs and contributing to a 401K to siphon off money before taxes. If you are an American citizen then you’ll want to check out the IRS Publication 502 for a full list of items that allow you to save on your taxes. These categories are designed for self-improvement and include things like prescribed weight-loss programs, stop-smoking classes, acupuncture, chiropractic care, therapy, braces, and eyeglasses just to name a few.