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Whether you’re a self employed individual or filing as a corporation, get peace of mind with taxes done correctly and efficiently. (Get More Info)

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Need help registering your new business as an LLC, corporation, or partnership registration? Keep it simple – let us help! (Get More Info)

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Do you need an Individual Tax Identification Number(ITIN)? We are authorized by the IRS to assist you in obtaining one. We can help! (Get More Info)

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If you’re not a bookkeeper or accountant, spending time on this task is decreasing your profits! Our services can help your business grow! (Get More Info)

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KF Tax & Accounting, P.C.

1970 Rawhide Drive, Suite 204
Round Rock, Texas 78681

Tel:  512-244-1516
Fax: 512-244-1567

Email: enquiries@kftaxandfinancials.com
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How to lower your taxable income

Posted by kftaxaccounting2014 on February 16, 2015 in Reducing Taxes | 0 comment

Ever wondered how your exemptions and dependents affect your tax return each year?

If it has ever crossed your mind then this is for you;Your exemption determines how much tax you owe each year and since its almost everyone that can claim exemption,here is how it works:

Firstly,you have to know that electronic filing is still the best method of filing,apart from the fact that it is easy and accurate,it will also help you determine the number of exemptions you can claim.

Also you should know exemptions will help you cut your taxable income.There are two types of exemptions which are the personal exemptions and exemptions for dependents.

Personal Exemptions

You are allowed to claim exemptions for yourself,and if you are filing a  joint tax return with your spouse, you can also claim an exemption for your spouse.But if you will be filing your tax return separately, then you can only claim an exemption for your spouse if your spouse had no gross income, not filing a tax return and was not a dependent of another taxpayer.

Exemptions for Dependents 

Your children or relatives who meets a set of tests can be claimed as your dependent,which means you can claim exemptions for each of them, but you must know that your spouse cannot be claimed as a dependent.You must list all social security number of each of your dependents on your tax return.For more Info see IRS Publication 501.

You should also know that some dependents may have to file their own income tax.It all depends on the amount of income they make,if they are married or the amount of taxes they owe. Also if you can claim a person as your dependent,then the person cannot claim an exemption on his or her own tax return,and this also applies even if you do not claim the dependent on your tax return.

 

Certain health insurance information is required to be reported for you and your family while filing your tax return.This includes a qualifying health insurance coverage or an exemption from the coverage, and if you do not qualify for the exemption and you did not obtain a qualifying health insurance coverage, then you must make a shared responsibility payment when you file your 2014 tax return.

Overall, you should know you can deduct $3,950 for each exemption you claim on your 2014 tax return.But this is subjected to your income limit which can reduce or increase  the amount you can claim.

If you want to make sure you’re claiming the deductions correctly, please give us a call! and we’d be happy to help you get the largest deduction you’re entitled to.

Director, Tax and Accounting
Tax Accountant specialized in Tax Accounting, IRS Representation & Resolution of Complex Tax Matters, Individual and Corporate Tax planning, and Tax Advisory Services.

Specialties: Tax Resolution, Tax Planning, Financial Planning and Analysis, Budget Management, Payroll Management, Cost Management and Optimization, SAP, Oracle, Hyperion, PeopleSoft

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