7 Easy Strategies to Pay Less Tax

by James Hendrickson on July 12, 2017 · 0 comments

how to earn money online from home without investmentAlthough the tax season has recently come and gone, you may be still be reeling from the amount that you had to pay Uncle Sam. If you’re like most people across the nation, you may be looking for legitimate and creative ways to ease the following year’s tax burden. The following are 10 easy strategies to help you pay less tax.

Verify Filing Status

Making the best financial investments plays a critical role in the success of your future finances. Being mindful of your tax deductions can also put your family in positive cash territory. If you received a huge refund this past year, you may have too much money in taxes deducted from your paycheck. Speak with your payroll office to select the correct filing status, because this figure determines your standard tax and deduction rate. No matter what your personal situation, you want to determine the best filing situation for yourself. If you’re married, you can select married and filing separate or married filing jointly. As a single parent, you can also garner the best tax deal by filing as the head household.

Give Back

The opportunity to donate to a charity directly helps individuals in need. If you make your monetary charitable contribution by December 31st, you can also deduct the items from your tax return. You can use your cancelled checks or credit card statements as verified proof of giving back. Typically gifts of over $250 warrants an acknowledgement from the organization who you gave the money to. Some charities also offer payment schedules where you can make a continuing monthly contribution.

Improve Yourself

Educational assistance can prove beneficial if you want to hone your job skills. They can also aid in career advancement. Speak with your company about current educational assistance programs available within. A business owner can offer over $5,000 of tax-free assistance annually. Although the boss is responsible for the bill, you don’t have to worry about this figure showing up on your W-2. The classes also don’t have to be related to your job industry either. Graduate level classes also qualify for the tax break.

Go Green

Homeowners looking for ways to cut down utility expenses and get a much needed tax break may want to go green. If your dwelling is in need of renovating, choose energy efficient updates. Solar hot water heaters, electrical systems, wind turbines and other eco-friendly devices have an uncapped tax credit.

Purchase a Home

If you’re considering a home purchase in the coming year, your mortgage can save you a lot of dough on your tax return. Mortgage interest is tax deductible. Since much of your payment for the first few years after closing is interest, the money could quickly add up. An added bonus is you also get to deduct the amount of money you pay annually for property taxes. Upfront lender fees such as points are another bonus for those looking for tax deductions.

Re-Check Old Returns

If you’ve done your taxes on your own, you may have missed some significant tax deductions. That’s why it could be worth your time to go through your past returns. If your tax return is within the previous three year period, the IRS allows you to amend your return by filling out the proper form. But you better be sure you see major changes, as the IRS will go over the documents carefully to ensure that your information is correct.

Have Your Taxes Professionally Done

You may think you’ll save a lot of money by doing your taxes on your own. Because they are current with the updated tax laws, an expert has the training to get you the best deal possible. A tax pro may also have added guarantees where if you’ve paid more money on your returns than you should have, you get money back from the preparer. A CPA has the education to handle more complex situations. Credentialing organizations also hold them to greater levels of competency. This level of professionalism could allow you to receive a much greater refund than an uncertified agent.

After you’re done filing your tax return for the year, it’s important to reassess your deductions. With the assistance of a tax professional and serious planning, you could qualify for some major tax saving measures for the following year.

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