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25 Mar

Minimizing your Tax Obligations – What are your options in 2013?

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Tax benefits bring on the required relief if you have been facing problems in managing your tax payments. However, the strategies which can help in minimizing your taxes can actually stem from different expenses like that of your employment or medical or the household related ones. For example, if you have a student loan, the payments you have been making on the loan's interest serves as the deduction. This mainly is done on the basis of what your adjusted gross income is. You won't even be required to itemize the deductions so as to be able to receive the benefits. Therefore, tax debt minimizations can actually help you in maintaining a tax debt free life.

Minimizing the tax debts in 2013

In order to minimize the tax debts and enjoy the various tax deductions, it is important for you to maintain a list of accurate and relevant information as per the requirement, like that of the invoices and the receipts.

So, the factors based on which you still can work on minimizing the tax debts are:

Interest payments made on the student loans – If you think that you are one of the fortunate graduates who have had the ability to use money towards the student loans, now is the time for you to enjoy tax benefits on the same. You can now claim deductions on the voluntary interest payments made. You can thus deduct the amount in full with regards to the student loan interest. The limit on this amount is $2,500 on an annual basis. What can be better than getting deductions on the most stubborn debt that fails to go away, even long after you have started to earn quite a good amount of money?

The mortgage interest payments made – Although, there isn't too high a chance that this tax benefit option is going to turn 'dodo' altogether, there can come in several other changes on the deduction factors. Like, from now on you would be allowed to file for the deductions only on primary homes and not on the secondary ones. In addition, there can be significant reduction with regards to the $1 million cap in case of the mortgage interest deductions and that can lower to even $500,000. Furthermore, Congress may also try and do away with this deduction in entirety for those who fall in the range of 'high income' earners. Market analyzers are of the view that such a change is going to have an immense negative effect on the housing recovery.

Donating land for the purpose of conservation – Even if you don't have too much as liquid assets but there still is enough property, and if you have parted with it mainly for the purpose of conservation in 2012, you may have a chance in writing it off. Moreover, if this land has been bringing quite a large amount of gains, the former land owner can work on deducting the contribution by at least 50% on the adjusted gross income.

Child tax credit – The best part about child tax credit is that although this was once a temporary option, it has recently been made permanent. However, there's bad news too. The more the amount you are going to make, the less likely will it be for you to get any deductions on this. Married couples will have the opportunity to get full benefit if they make $110,000 with regards to the 'modified adjusted gross income' in a year or may be less than that. In case of singles who fall within this limit has been reduced to $75,000. With every $1,000 on these amounts, the child credit is going to drop by $50. You thus may have the advantage of getting a $1,000 credit, with regards to each dependent child, under the age bracket of 17.

So, these are some of the tax items that you can work on, in order to minimize your taxes or rather get the deductions. If you can manage to get the tax deductions, you may also be able to remain debt free throughout, even with regards to your taxes.

 

This is a guest post by Andy Raybuck

Andy Raybuck is a financial writer who has expertise in dealing with various financial issues. He tries to impart to people the different situations and simple solutions to get out of difficult situations by contributing financial write ups to websites and blogs so that he can help people who are struggling with financial worries. He is associated with DebtConsolidationCare .

Last modified on Friday, 31 January 2014 07:15

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