15 Legal Secrets to Reducing Your Taxes

1. Contribute to a Retirement Account.
2. Open a Health Savings Account.
3. Use Your Side Hustle to Claim Business Deductions.
4. Claim a Home Office Deduction.
5. Write Off Business Travel Expenses, Even While on Vacation.
6. Deduct Half of Your Self-Employment Taxes.
7. Get a Credit for Higher Education.

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How can I reduce my taxable income?

Save Income Tax on Salary

1. Deductions under Section 80C, Section 80CCC and Section 80CCD. Citizens of India can save tax under these 3 sections.
2. Medical Expenses.
3. Home Loan.
4. Education Loan.
5. Shares and Mutual Funds.
6. Long Term Capital Gains.
7. Sale of Equity Shares.
8. Donations.

How can I reduce my taxable income 2021?

6 Ways to Lower Your Taxable Income

1. Save for Retirement. Retirement savings are tax-deductible.
2. Buy tax-exempt bonds.
3. Utilize Flexible Spending Plans.
4. Use Business Deductions.
5. Give to Charity.
6. Pay Your Property Tax Early.
7. Defer Some Income Until Next Year.

How can a salaried person save tax?

Top 10 Tax Saving Options for Salaried in 2020

1. Employees’ Provident Fund (EPF)
2. Public Provident Fund (PPF)
3. ELSS.
4. NPS.
5. Tax Saving FD.
6. Life Insurance Premium.
7. HRA.
8. LTC.

What income is tax free?

Individuals with Net taxable income less than or equal to Rs 5 lakh will be eligible for tax rebate u/s 87A i.e tax liability will be nil of such individual in both – New and old/existing tax regimes. Basic exemption limit for NRIs is of Rs 2.5 Lakh irrespective of age.

How can I avoid paying taxes on a large sum of money?

Some smart things to do with extra cash are to fund an IRA, health savings account, or another qualified retirement plan.

1. Understand Tax Implications. Before you start to worry, research the tax rules for your specific income source.
2. Fund an IRA.
3. Fund an HSA.
4. Sell Sluggish Stocks.
5. Research Additional Deductions and Credits.

How can I avoid paying taxes at the end of the year?

Top 8 Year-End Tax Tips

1. Defer your income.
2. Take some last-minute tax deductions.
3. Beware of the Alternative Minimum Tax.
4. Sell loser investments to offset gains.
5. Contribute the maximum to retirement accounts.
6. Avoid the kiddie tax.
7. Check IRA distributions.
8. Watch your flexible spending accounts.

Should I pay income tax?

Any Indian citizen aged below 60 years is liable to pay income tax if their income exceeds 2.5 lakhs. If the individual is above 60 years of age and earns more than Rs. 3 lakhs, he/she will have to pay taxes to the government of India.

What is the minimum taxable income?

Single: If you are single and under the age of 65, the minimum amount of annual gross income you can make that requires filing a tax return is $12,200. If you’re 65 or older and plan on filing single, that minimum goes up to $13,850.