Top 8 Tips for Tax Saving for H1B visa,L1B 2015-2016
preparing and filing tax is No Rocket Science, Do not spend money with Tax consultants. H1b holders are very skilled and TAX filing needs only basic common sense and you can file by yourself and infact save more than what the tax consultant can.Just ensure you use the best software to prepare your taxes and remember these 8 tips below
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1)Make investments in retirement accounts to save the taxes Ex: In 401K, traditional IRA.
2)If you invest in Stocks/Mutual funds/Fixed Deposits, plan to hold it for at least one year to make the gain/loss long term which is tax favorable.
3)Consider buying a home because you could deduct mortgage interest deduction, & real estate tax deduction. If you already have home, pay your mortgage payment of next year’s first month early. (E.g. instead of 1 Jan, pay 31st Dec). This way you can get deduction in current year. Also pay real estate taxes early. Also You save a lot on Rent when you own a home, and also don’t forget appreciation.
4)Be generous, donate your clothing and household items to charity. Donate $ and help the needy.
5)If your employer has flexible spending account benefits for any medical or dental or dependent care cost, ensure you deposit in the same.
You can deduct Medical expenses only if it exceeds 7.5% of your adjusted gross income (AGI). So keep track of your dental and medical expenses from start of the year to get this deduction.
6) The spouse of a person on H1B visa(H4 visa) can be treated as resident for tax purposes by filing a declaration along with the tax returns even though he/she might not admitted to the United States. The advantage of doing so is that you are able to claim additional spousal exemption on the tax returns which directly could result in tax savings
7) You may be able to deduct moving expenses on your tax returns if you meet a specified distance and time test. You can deduct the cost of packing, crating, and transporting your household goods and personal effects and those of the members of your household from your former home to your new home.
8) File Jointly if you are Married, and you can save taxes.
Another quick look on how to save checklist
Penalties for early withdrawal of savings
Student loan interest
Prescription eyeglasses, contacts, and hearing aids
Medical transportation costs
Local and state income taxes
Personal property taxes or real estate taxes
Points paid for a mortgage or refinancing a home
Unreimbursed employee business expenses
Mileage and other expenses associated with work
Tax preparation software and fees
We are not Tax consultants nor this is a legal Tax advice, please consult a Professional Tax consultants for specific information.