What can I do to pay lower taxes for this year?

Question

Last year 2006 my dauhgter and her child been living with me for several years. They moved out this year in January. I make under 34,000 a year last year I got a refund because of my dependents. I have feeling I going to have to pay taxes which i can't afford. Any help please. Thanks inadvance

Answer 1

Change your W-4 to 0 exemptions on your job. This will take out more money towards taxes and less on your paycheck, but you will get more back at the end of the year because you will more than llikely have overpaid the government. Also, you can take advantage of some of the pre-tax deductions on your job. Like 401k, transportation, etc. Talk with your Benefits person at your employer to see where you can take pre-tax deductions.

Answer 2

Don't forget you can still claim your children if you help pay for 50% or more of their living expenses until they graduate from college. Next talk to your human resources representative, and ask what they can do to either have you pay more to the IRS so that come next year you won't owe anything. Another idea is to open an IRA (individual retirement account) and start contributing money to it weekly or monthly, as that money would become tax deductible. I like the idea of filing 0 for deductions on my W2 because then the money is taken out through the year, then you are overpaying, giving yourself a refund come next year. The only problem I see with that is you are giving your money to the government, instead snake that money away into an IRA, that way you are saving for your future.

Answer 3

Since you won't have the two dependents this year, and any associated credits, you might want to adjust your W-4 to have a little more taken out of each pay - will be less painful to lose a few dollars a week than to owe hundreds at tax time. Your expenses should be lower with them gone, so a few dollars a week should be doable.

Answer 4

You can either reduce your taxable income or reduce your tax liability. Make the maximum contribution to you retirement plan and look for tax free investments. Donations and education credits help, but to get those you have to give money out.

Answer 5

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Answer 6

Make an appointment with a competent tax planning accountant or attorney.

If you do not have one, you could set up an IRA.

Answer 7

Fake your own death and live tax free !!

Answer 8

Think "charitable contributions".

Answer 9

claim 0 on your w4, that way you can have a bigger return

Answer 10

make less money spend more of your money or have kids