Paying Less and Saving Money on Taxes
Tax season often sneaks up on a person and many people are not prepared to see what happens when their taxes are done come the beginning of the next year. Many families are scared to death when it comes to figuring out their taxes. This is because taxes are the largest expense that a family will run across through out the year. Often times a family will find out that they are paying more in taxes than what is required. There are many tips to help you not fall into this category.
Computer
One of the most popular ways to help you save taxes is to purchase a computer program such as TurboTax or H&R Block’s TaxCut. These programs are becoming more in depth every year can help you save money in several ways. By using one of these programs you will find that you will be able to e-file your tax return. This will help you to save on filing costs or having to pay an accountant or another type of tax preparer. A bonus is that because you have filed electronically you should get your money back in about two weeks.
Itemize
People sometimes lose out on money they are deserved because they do not itemize the deductions that they have. The reason why they do not itemize is because they are trying to save time. However what they are really doing is losing out on probably hundreds of dollars. Taking the time to itemize can help you get a larger return in the end. It is definitely worth the additional time that is need.
Purchase A House
If you are a person who has thought about purchasing a house but has not yet made the final decision you are losing out. You could be paying less tax by being able to deduct interest on the mortgage loan. If you are living in a home but are renting from someone the person you are renting from is receiving the extra dollars from your house. You might want to consider buying the house from your landlord.
401K
Another option for paying less tax is to sign yourself up for a 401K plan. This is a plan that puts money from your paycheck into a retirement account for you. The good thing here is that the money that is transferred into the 401K is not taxable income. Therefore you are paying less in taxes.
There are also other benefits to a 401K such as being able to borrow money from the plan. Many people with bad credit often turn to personal loans with bad credit lenders. With a loan from your 401K plan this will not be necessary because in reality you are borrowing from yourself.
Transfer Credit Card Debt
Another popular way to help you save money when it comes to tax time is to use the equity you have in your home as a debt consolidation loan. Your credit card interest is not tax deductible but the interest from a mortgage loan is. Many people will use a refinance or a second mortgage to help pay off their debts and then claim the interest on their taxes.
If you take the time to do your taxes the proper way you will find that you will have many more tax deductions and will owe a lot less in the amount of taxes that you pay. A little patience while doing the taxes can reward you with more money in the end.
Author Bio
Darrell is a guest post contributor. He loves to write on finance based issues.
Categories: Federal Tax, Income Tax, State Tax Tags: federal tax, income tax, saving money on taxes, taxes
The Consequences Of Tax Evasion In The UK
It is the job of the HM Revenue & Customs office, otherwise known as HMRC, to collect taxes from United Kingdom citizens, and it also will monitor tax payments to ensure compliance. If the HMRC has reason to believe that you may be evading payment of taxes, an investigation will be initiated, and you may face a number of consequences. As a resident of the United Kingdom, it is important to understand this process and the possible penalties.
The Investigation
The HMRC may conduct periodic checks of citizens to ensure compliance with taxation laws, and through these checks, the HMRC may determine that evidence is present indicating tax fraud or evasion. In other cases, a concerned citizen may provide the HMRC a tip that will instigate the investigative process. The investigative process involves the HMRC contacting you directly, and you may choose to comply and participate with the investigation or not. However, the investigation will proceed without your participation. Because of this, it may be in your best interest to work with the HMRC and to provide all documents and supporting evidence requested in a timely manner. Keep in mind that you are permitted to have professional representation during any meetings with the HMRC.
The Process
If your tax payment status is investigated by the HMRC, you may be asked to provide supporting documents or to prepare a disclosure statement to corroborate the amount of taxes that you paid. The HMRC may conduct its own investigation as well, and it may review your tax documents, receipts, bank statements and other financial data. The process may involve several meetings and hearings. Ultimately, the HMRC may determine that evasion did not occur, or you may be required to pay additional taxes. If additional taxes are owed, you may also need to pay interest charges and penalties.
The Consequences
The consequences of tax evasion in the United Kingdom can be damaging in a number of ways. Because those who are caught evading taxes must pay interest charges and penalties on the taxes originally due, there is considerable financial expense associated with this. In addition, many people will choose to pay for professional representation during this process, and there is cost associated with this. The names of those who are caught evading taxes will be published, and there may be an element of public humiliation that a tax evader will be forced to deal with. In addition, some cases of tax evasion may result in criminal charges, and this may cause the guilty party to face additional legal issues. As a final note, those who are caught evading taxes in the United Kingdom often will have their tax returns reviewed more carefully by the HMRC in the future, so there will be added pressure on the individual to ensure that their tax returns are filed truthfully and accurately.
Tax evasion is a serious matter in the United Kingdom, and it can have costly and long-term consequences on your life. The HMRC may be more lenient on those who come forward with their actions or who comply with investigations.
Sally is a content specialist for Francis Clark Tax Consultancy, a business based in South West England who provide tax consultancy services to over 400 firms, visit FCTC.co.uk to find out more.
Categories: Federal Tax, Income Tax, Tax Evasion, Tax Law Tags: tax evasion, taxation, taxes, united kingdom