For most people, paying less tax seems impossible. Others try to hack the system and try to find illegal ways to escape the IRS. While they might be able to do so, it wouldn’t last very long at it would most probably end to more tax penalties; or worse, imprisonment.
But how can you reduce your personal tax without resorting to illegal deeds? Read on to see how you can get away with less taxes while making the IRS happy.
Take Advantage of Tax Credits
This may sound obvious, but not many people take this seriously since it might look like it won’t make a difference. It would.
There are a lot of ways you can get tax credits such as going to college, investing in IRAs, take child tax credits, earned income credits, American opportunity credit, lifetime learning credit and a lot more. By taking advantage of these, you can slash off the amount of your tax credits from your tax bill.
Health Spending Accounts
Having a Health Spending account, your tax free money can be spent on your medical expenses. Since the need for medical attention is a necessity, why not take advantage of this to lessen your tax? This way, you are making your health a priority for saving and save tax money at the same time.
Donate to Charity
What’s a better way to reduce taxes while helping others in need than donating to charity? Yes, you can write your charitable donations in your return if you itemize your deductions to lessen tax bills. But don’t just include the donated cash. You can include gifts, foods, and other non cash donations to get the most out of your tax deduction. A lot of people, especially rich people, do this. This is, at the same time, a great opportunity to help charitable causes while being able to reduce tax.
If you’re self employed, you might not be aware that you’ve got a lot of opportunity to save on your taxes. You can include deductions such as shipping, advertising, business website fees, partial internet charges, office supplies, business related travel, and other expenses you’ve had to operate your business. Your home office also counts by declaring a specific portion of your house as an office.
Hire a Professional
By having a professional by your side in taking care of your taxes, you can see a lot of opportunities to reduce your taxes. Be it due to your existing expenses that you’re not deducting, tax credits you’re not claiming, or other strategies to implement to reduce taxes, a professional tax expert can help you make the most out of your money and prevent you from spending all of it on taxes.
Seeing opportunities as they arise, or by creating the opportunity itself to reduce taxes, is the key to making you handle tax efficiently. Awareness is the perfect defense against financial loss and this can be done with enough knowledge and professional assistance. Learn How to Reduce Your Personal Taxes w/ Accountant Terry Kime, Certified CPA in Alpharetta, GA get help to file your individual-personal yearly or quarterly returns.