Paying
Taxes is inevitable. No matter which country you live in, you have to pay taxes
if you get more than a certain threshold income.
However,
there are some easy ways by which you can avoid paying too much tax.
1.
Take control of your finances: Many
Americans do not know how much they receive and spend till the last day on
which they file their taxes. If you are one of them, then this is the time to
take control of the situation and start paying more attention to your books.
2.
Spend wisely and save for future:
Most government regulations incentivize people to save for their future. It is crucial
that we start saving now than later. It has double benefits-
a.
You are
saving money for your retirement
b.
You do not
pay taxes on income that is saved for future expenses. Your 401k plan falls
into this category. Investments and Insurance also come into this category.
3.
Get Expert Advice: It is a good idea
to get expert advice from someone who understands Tax laws. Every person's
financial planning is different. It is based on people's income, expenses,
future plans, current liabilities, and external environmental factors. Yes,
financial advisors may bill you some fees. But they will save you quite a lot
of money which you might not be able to stop if you do not use their advice.
Talk to your friends, and co-workers to see if they can recommend someone. You
may want to check the internet and get opinions about them. Also, you may want
to see specialized websites to find a CPA.
4.
Educate yourself: You are the most
motivated individual to keep your own taxes. Therefore, it is always a good
idea to have a proper knowledge about basic business structures, as well as
some valuable Tax benefits. Some CPAs or Tax firms offer one off counselling
session on the phone or in person. You should utilize this service and educate
yourself by asking them Tax related questions.
5.
Change the income mix: Different revenue
sources have different tax rates. For example, income from investments is taxed
at different rates than that from your monthly paycheck. Income earned from the
business can provide you to pay lower taxes because of the deductions from
business expenses.
6.
Charity: Did you know that any money
that you spend on charitable causes is Tax deductible? You should keep track of
all your charitable expenses and hold them in deductions on your Tax Return.
Author Bio:
Sandeep
Chauhan is a Marketing enthusiast. Sandeep is responsible for Product Vision,
Marketing and Technology at BestTaxPreparers.com. Best tax Prepares helps
consumers to find California CPA tax professionals who are trained in specialized skills.
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