08:07 19 December 2013
Times are tough everywhere nowadays. The economic downturn has not spared anyone. Debt is making life for most people harder than ever before . Everyone has to dig deep into their pockets to make sure that they make ends meet.
Paying taxes and keeping up with other household expenses is proving to be a tall order for many people to surmount. Having said that, taxes are everyone’s civic duty and cannot be avoided. They drive economies and hence make up a huge chunk of most government finances.
Empower yourself with knowledge
The adage ‘knowledge is power’ is applicable to personal tax planning. To this end, it is important that you learn the proper means of planning taxes. It is important that you equip yourself with knowledge on the basic tax laws. Only then can be able to leverage the loopholes in the tax laws and in the long run alleviate the effects of taxation. This knowledge ensures that you don’t spend a penny more than you need to when paying taxes.
There is an upside to paying taxes_ there are some allowances that ease the tax burden. You should equip yourself with the knowledge of the various tax ceiling categories. Also you should know how much you are spending on taxes for health care, mortgage, charity donations and others.
Pensions: Take full advantage of the pension schemes available to you
Pension schemes have tax breaks. You should ensure that you fund your pension so that you take full advantage of the tax reliefs that are there. If you undertake this step, you should make sure that you are equipped with the details contributions.
Investing as way of reducing your taxes
The tax laws in the UK offer tax breaks for people who have investments and ISAs. Investments essentially mean that you make money while taking advantage of taxation.