Tax is something that we are supposed to pay as a charge to the government. It pains a lot when you have to pay tax on your salary and even the bonus money. You make a log-in into your bank account to check if a bonus has arrived and you get startled to see that the bank has charged a significant amount from it in the form of tax on your salary income.
You always have many expectations with your salary and bonus income and rather a bonus awaits many expectations as well as wishes as most of us are hardly able to save anything from the salary, but we always make dreams to purchase something new for the house from the bonus income and if this income meets a deduction in the form of taxes, we are left heartbroken. In order to make your bonus tax free, you can follow the following tips:-
How to Make Your Bonus Tax Free
1. Ask For Cash In Hand Bonus Instead:-
My salary often crosses fifty to sixty thousand per month and thus I have to face a tax deduction. This makes me cry the most when I plan purchasing a new TV or refrigerator from bonus income and when it too comes taxed. My boss suggested me a better alternative to spare myself from such taxes. He advised me to take cash in hand payment and as I was taking cash in hand, there were no taxes imposed on my income.
2. Put the Money in a Special Scheme:-
There are many schemes like retirement plans, pension plans and government based investment schemes where you can invest this money in order to keep it free from taxes. There are many such plans available in US as well where people can invest money with a goal to ensure their future after retirement time.
3. Pay Your Mortgages with It:-
According to a friend in my known list, your bonus is never taxed if you pay your mortgages with it and thus this time when your bonus arrives, just fix it for paying your mortgages, credit payments and other such payments which are never taxed by the government.
4. Check If It Is Below Taxable Threshold:-
Some people stay troubled with taxes even when their salary is non-taxable salary and non taxable salary means non-taxable bonus as well. In order to know if your bonus is taxable or not, just enquire the bank about minimum taxable threshold in your area and if your bonus level is below that threshold, no bank can charge tax over that income of yours.
5. If You Make Some Charity:-
Even in the countries like India, there is a procedure that if you are working for social welfare, says donations, charity etc. your income can’t be taxed at all. Government exempts all the taxes when you are involved in works of social welfare and thus you can also get benefited by getting involved in one such works.
6. Ask the Employer to Pay It in Two Installments:-
If you are working for any private institution or firm, just ask the employer to pay your bonus this time not directly in the bank, but instead ask him to pay it in two installments or in the form of two cheques issued on your name. When you divide the bonus income in two installments, it will surely come below taxable income number and thus you will be exempted from all the taxes subjected to be imposed on your bonus this way.