In times where and when money is hard, it is natural that people would want to save as much of their hard-earned money as possible. One way to do it is to seek for personal tax shelters that will allow an individual to safeguard their earnings from additional taxes. Here are some free tips if you are looking for your personal tax shelters:

You can invest in real estate purchases since the interest you pay as well as the real property taxes are deductible against your gross income and therefore reduces your taxes as well;

There are trust fund programs that can also serve as tax shelters. But be sure to understand the fine prints carefully as there might be trade-offs in using these programs as personal tax shelters.

Granting loans that are interest-free can also be your personal tax shelters. For instance lending a certain amount of money without interest to other family member/s that in turn invest the money and earn for it will lead to considerable tax savings to you.

Engaging in a home based business is also one of the more effective ways of personal tax shelters. There are several tax advantages and benefits you can enjoy when you are into home based business.

The above are just some of the tax shelters that will shield you from paying additional taxes. In these times of crisis, though, it may well be worth considering home based business. In a situation where you use most of your earnings to finance your home based business, you’ll find that these expenses can be tax-deductibles. Here’s how: Say you use a portion of your house for your home based business. The equivalent occupancy cost will be deducted from the amount of taxes that you pay. These costs include but not limited to maintenance and repairs as long as they do not fall under capital expenses, rental fees, and other home improvements.

You can also deduct from your usual taxes the expenses you incur as you use your vehicle for your home based business. You just have to keep the pertinent documents reflecting the expenses such as the gas receipts, mileage log, maintenance receipts, etc.

What ordinarily are your everyday household expenses that are unrelated tax deductibles can be now converted into tax deductibles as long as these expenses are incurred in relation to the operation of your home based business.

If your home based business is being operated on top of your lucrative usual job, you can channel your income from your usual job to pay for the wages of your family members who form part of your home based job work force. This way, you are also legally diverting your taxed income into the earnings of your family members that fall under the lower income tax rate.

There are other countless ways of personal tax shelters that you can explore and implement. Just be sure that these are legal means to shield you from higher income tax. From these various ways, you can choose what is right for your needs and requirements.

Buy a tax exempt life insurance policy (Please see Universal Life)

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