P.I.T.A. - Tax Adavantages

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While investment in many spheres is not exempt from taxes, yet the government has introduced tax advantage status of private investments that it wishes to promote. If an investment scheme seems to be working in favor of public interest, the government supports it by offering certain tax exemptions. 

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Many countries are experiencing greater pressure on pension schemes. The benefits afforded to the pensioners are through the contributions made by the working population. It is putting greater pressure on the working mass and thus the government requires more number of people for the workforce. The governments find a way out by supporting many privately funded retirement plan through tax exemption and excluding the employee’s taxable income from any taxes if he contributes to any such scheme.

An individual can also receive the new Hope tax credit on his tax returns when his dependent offspring uses the 529 state college savings plan account for college and the family fends for household income requirements. Hope credits follow income limitation for eligibility and you can claim it only against payment of tuition fee and other associated expenditures.

You are not eligible to receive federal income tax deduction even if you contribute to Section 529 state college savings plan while some states provide their residents deduction on personal income tax returns if they take part in an in-state program.  Further, if you make withdrawal for paying "qualified higher education expenses", you are eligible to receive exemption from federal income tax.

Many state and federal laws provide remuneration to their employees if they use alternative commuting method and thus you can benefit when your company offers transportation program for its employees. If an employee’s company provides for his vanpooling cost or transit passes then he can get Business Energy Tax Credit or state and federal tax credit. Thus, with many kinds of tax advantages offered by the government you can minimize tax expenditures considerable.

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