Tax is one of those words that when most of us hear it, we internally scream inside. For those of you who run small businesses or are self-employed – you have to become familiar with tax and the way it works in order to be successful and not face the penalties. One thing that is also important to note is that you should learn how to save money on your tax return.
There are actually a lot of different ways that you can save some money on your tax return this year, and we want to guide you through them so that next time you file a tax return you can make the most of those savings.
Claim tax credits
The first things you can do to help you save money with your tax return is claim tax credits. Tax credits are basically something that provides you with extra money for people looking after children, caring for a disabled individual, or looking after someone with a low income. There are two types of tax credits you can claim: working tax credits and child tax credits. If you have never considered doing this before, now is the time to start and you could save some real money here.
Pay into a pension
You’ll notice when you file your self assessment tax return that there is a section about pension contributions. You’ll be asked whether or not you pay into a pension either alone or through your employer, and your government will give you a tax relief to bump up the figures of your pension as a reward for saving towards your retirement. As such, if you don’t already save into a pension scheme you definitely should.
Take a course
One thing you can do to help you learn how to better save on your tax return is take a tax preparer course. You can find a course online to earn your Tax Preparer Certification and by doing this you will be able to learn how to properly fill in your return and make the most of every part of it.
Working From Home allowance
It is important especially at the moment to consider the benefit of a working from home allowance when filing your tax return. Since the pandemic began, a lot of us were forced to work from home for a large portion of time and this has impacted things like our household bills as well as wear and tear on household resources. The good news is that the government will pay you back a percentage of the money you have spent to work from home and this will mean you save some money on your tax.
Reclaim overpaid taxes
As many of us have struggled in 2020 due to losing our jobs or being put on furlough – you can actually claim back some of your overpaid tax if your income has fallen short of what it was the previous year. This means when you fill out your tax return you might find a nice little bonus awaiting you of overpaid tax that is to be credited back into your account.
