Tax Savings
If you’re in the comfortable position of being a business owner, or if you’re bringing in a good monthly salary, then there are many ways that you can reduce your personal tax burden. First of all, it would always benefit you to employ a personal accountant and keep them on retainer, even if you’re a company employee. This tactic will keep you in touch with all of the accounting changes that determine the ways in which you can save on tax payments.
One good way of saving those tax dollars is to take advantage of the change in the way stock dividend payments are taxed by central government. In 2003, the US government published new tax rules in their Jobs and Growth Tax Relief Reconciliation Tax publication. In this document, the government explained new rules for reducing taxes received from dividends on domestic, and qualifying foreign corporations. In some cases, taxes on these dividends have been reduced from 35% to as little as 15%. Notice should be paid to the small print with reference to holding periods and the various statuses of each type of dividend.
One other accounting change is the way in which business are taxed on the purchase of business assets. The government is now prepared to offer tax reductions when profits are fed back into business through the purchase of business assets. This doesn’t mean that you go out and buy a whole bunch of office furniture in order to reduce your tax bill, but if your furniture is looking a tad shabby, then now might be a good opportunity – before the government changes its mind again.
Don’t forget that many tax saving opportunities surround investment in the stock market. For example, if you hold any worthless stocks in companies that have gone broke, then fear not. Those losses can be offset against the tax burden you carry. Another tactic to save tax is to bequeath stocks to your children. If they then decide to sell those shares, they will be taxed at the child tax rate and, not the rate that you would have paid if you had sold them yourself.
Remember - keep in touch with your accountant. If they are worth their salt, they’ll keep you updated with any new tax and accounting regulation changes.
For more infomation on tax savings choose from the list below. |
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Banking - Business Finances - Economics - Insurance - Investing
Major Purchases - Personal Finances - Stock Market - Taxes
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