Defer your income till a later date - Most people are in a higher tax bracket when they are working than when they retire. Deferring your income until retirement can certainly pay rewards in the long-run.
Throw money into a 401(k) - Many employers offer tax-deferred retirement. Some employers will match the amount that you put in so take advantage of this valuable form of retirement savings and start to accumulate some healthy retirement assets.
If you own your own business, setup and contribute to a retirement plan - As these are allowed even for moonlighting or sideline jobs it is worth looking into putting some of your income directly into your own plan.
Defer bonuses or similar deferred income - If you are due a bonus payment at the end of the year, you may want to try and defer the payment until January. Not only may you be entering a lower tax bracket but you may be able to save taxes on the deferred income.
Pay close attention to trading activity in your portfolio - Remember, this can be a complex tax area so pay attention to what goes on in your portfolio, particularly when selling. In the event of your death, no capital gains tax is applied to appreciation.
Make the most of the Gift-Tax Exclusion - You can give up to $13000 as a gift ($26000 if you are joined by a spouse). You can do this and avoid federal gift tax as many times as you wish. These transfers are taxed at the donee's tax rate, which is often much lower.
Give appreciated assets to charity - It makes sense to give assets to charity before you have sold the assets and paid the tax on the appreciation. This can be a considerable saving, depending on your tax bracket.
Make note of your mileage for all of your business, medical, moving and charitable driving - You may be entitled to deduction on miles driven but you will have to keep a daily log of all of your miles.
Consider Separate Filing Status - This may be worth considering, particularly if you and your spouse have a similar income or if one of you has large medical expenses, itemized deductions or casualty losses.
If you're self-employed, consider employing your child - If your child is under eighteen, he or she is not subject to employment tax. This will not only relieve your tax burden but also it will shift assets to your child.
www.bibifinancial.com website is a financial data and news portal, discussion forum and content aggregator. Bibi Financial is not a broker/dealer, we are not an investment advisor, we have no access to non-public information about publicly traded companies, and this is not a place for the giving or receiving of financial advice, advice concerning investment decisions or tax or legal advice. We are not regulated by the Financial Services Authority. We are an educational forum for analyzing, learning & discussing general and generic information related to stocks, investments, and strategies.