Planning for the yearly tax filing effort is an ongoing and year long activity. At the end of the financial year, you collate all your efforts throughout the year to get the maximum tax savings. This is the way it should be done but many people just wait until the end of the year before making trying hard to justify all the savings that they want from their tax filing. Tax planning should be considered not only a way to reduce tax liabilities but also something that can contribute significantly to savings and financial growth.
The very complicated tax code, whether it is for personal or business makesImage may be NSFW.
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tax discussions something of dreaded topic. However even if you absolutely hate it, you cannot choose to ignore it. Fortunately, there are a number of tools which you can use to strategize and plan your tax filing to get maximum savings.
There is a general consensus that the Public Provident Fund is the best option when it comes to tax savings. It is the favourite among the public because investments in this fund is eligible of tax deductions up to $1 million. Furthermore, the income you get at maturity is not taxable.
In recent years, there have been several other alternatives to the Public Provident Fund which is gaining popularity as tax savings options. One of them is investing in life insurance. Money paid for life insurance policies are tax deductible making it both a worthwhile investment and tax planning benefit. Another popular alternative is the Savings Scheme linked to Stocks. Although this option is still pretty new, many people are attracted to it because it is one of the most lucrative options. Although there is a fair amount of risk involve, these investment are great in managing the tax liability and the returns are absolutely tax free.
