3 Ways Individuals and Businesses Can Save on Taxes

Calculating taxes

Taxes are involuntary fees a government imposes on individuals and corporations so it can fund its activities. Take note of the word involuntary. This is one of the reasons some individuals dislike paying for it. However, an article said that the only people who don’t like paying taxes are the ones who don’t understand the tax itself.

Nonetheless, whether you enjoy paying your tax dues or not, we believe that you want to keep the cost as low as possible. Here are some proven and legal ways to keep your taxes down.

Buy a used vehicle

Buying a used vehicle is more cost-effective not only because pre-loved vehicles are cheaper than brand-new ones but also because some states don’t have the sales tax for used cars. But note that you can’t always get away with it. If you live in a state where the sales tax is imposed on buying a used pickup truck from a dealer but you bought the car in a no sales tax state, you still need to pay for the taxes. This is because you will register the car in the state where you reside, not the state where you bought the car from.

If you are in New Zealand, buying a secondhand car also means saving a lot on taxes. This is because depreciation of cars in this country plummets really fast. Research says as soon as your car reaches about 56,000 km, you’ve already lost 54% of its original retail price. This means tax costs are also lower.

Donate

Some countries offer tax credits when you donate, whether you are an individual or a corporation. A study conducted among 43 countries found that 89% of these countries provide tax incentives for those who make charitable contributions.

What’s interesting is that 28% would give an incentive even though the contributions were made internationally. That means whether you donate within your country or another, you can get tax credits. Another interesting point of tax credits via charitable contributions is that the recipient does not always need to be operating locally. 39% of the respondents said that whether the organization operates locally or globally, they can still get a tax credit.

List all your expenses

Expenses being listed

When we say all, we mean all. Kiplinger published an article about 14 tax breaks that are unbelievable but true. Here are several examples:

There was a bass guitar player who is also a music professor. He once deducted his travel costs when he traveled to rehearsals and performances. He claims that these events kept his skills sharp because he played with other musicians, which he eventually taught to his students. The tax court allowed him to write it off.

Another interesting story is that of a professional bodybuilder. He used body oil in competitions so that his muscles would glisten and you claim this as a business expense. The tax court ruled in his favor.

Margaret Mitchell once said, “Death, taxes,and childbirth! There’s never any convenient time for any of them.” Luckily, you can make them easier now.