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Tax Relief 101: Postpone Extra Income If You Can
Posted By Jim On 11/29/2006 @ 1:53 pm In Personal Finance | 4 Comments
This is an old tax tip I was surprised I hadn’t mentioned before but it involves postponing any extra income that you anticipate you’ll get, if you can, until January 1st of next year. By pushing it off until then, you can wait until you file for taxes the following year (April 15th, 2008) before you’ll have to pay taxes on that income.
This works the best if you have some self-employment income, as little as it may be. Try to push off receipt of that income until January and you won’t have to pay taxes on them until next year. If you don’t have any self-employment income but you do anticipate a Holiday bonus of some kind, ask if you can take that in January.
If you can push off $1,000 in income (and assuming you’re in the 25% tax bracket), you’ll have an extra $250 to play with next year. Enjoy!
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