Protecting your income from taxes is not entirely correct for it goes against the law and affects the normal functioning of the state which is dependent on our taxes. It is like violating the social contract the citizen has with the state that entails paying taxes in exchange for protection and other facilities. The correct approach is to save your money by staying within the orbit of law, utilizing any tax law that can reduce your taxes. There are certain loopholes in every system that can be used to save some bucks. All you need is some tax help in Brooklyn to manage your taxes a little more smartly. There is nothing illegal in it, just a combination of smart planning, organization, and know-how of the law.
- You can save some money by setting up a retirement plan. Law allows you to put about $20000 in the plan thus reducing your taxable income considerably. Having a retirement plan gives you the choice to let your income be taxed now or later when you withdraw. You can choose the one which costs you less.
- The government encourages investments. Instead of saving your money and putting it on hold, invest somewhere. Bonds are often a good option as some bonds like municipal provide tax-free income. Moreover, gains on investments are subjected to lower taxes considerably.
- Look for tax credits. Before filing your taxes, find out if you are eligible for any tax credits. You can also look for credits for care providers if you are supporting a child or someone is dependent on you.
- Get a medical plan. The money you put in this plan for your medical bills makes it tax-free. Check out the rules for more details. Moreover, if you have incurred heavy medical expenses, you can deduct them from your taxable income.
- Do a little digging and familiarize yourself with business tax laws. Law allows you to deduct the cost of raw materials, transportation, and establishment charges from your taxable income.
- Where hobbies and businesses coincide, significant tax deductions can be made. Put up a side business if you have some savings, it will help you save money in taxes with the added benefit of potential profits.
- Check for your employment benefits. Your company may be offering you benefits on your taxable income.
- It is a smart move to pay only the exact amount of tax, not less not more. You may think that you will get a refund but believe me, it is better this way as the refund doesn’t come in your pocket for the whole year. Contrastively, paying less will incur more interest on you.
- Failing to file a tax return on time is more harmful than not paying the money in some ways. If you don’t have the money to pay, some programs can help you. But if you don’t file altogether, the penalties may be harsher.
If you abide by the above tips, you will some money without going outside the law. Dig up a little and study financial information, it will help you a lot.
Fisher Stone Tax Accountant
Brooklyn P.C. 88 Suydam St, Ste. FS, Brooklyn, NY 11221