9 Easy Solutions to Minimize Tax Liabilities

9 Easy Solutions to Minimize Tax Liabilities

Reducing taxes is the wish of so many but achieved by only a few. The reason? Those who know how to reduce their taxes have a good understanding of taxation -but how do you gain that knowledge? By hiring a tax expert. Here are ways that come tax time, you might be able to give the IRS less tax money.

  1. Start your retirement program.

If you have started a retirement program (pension or annuity), you can officially report it in your tax form. Premiums paid to such a program decrease your taxable income and consequently your taxes as well.

 

  1. Minor charitable acts mean a lot.

Most are aware that giving money to charitable institutions and foundations can be translated to tax deduction later. What most people do not know is that simple acts of altruism like donating a used laptop or using your car to escort seniors to their nursing home is also tax-deductible.

 

  1. Baggage fees are tax-deductible.

If you travel frequently, the dollars you spend for airline baggage can also be reported as a tax deduction.

 

  1. Studying helps reduce taxes.

If you have officially enrolled in a college course can reduce your taxes through the Lifetime Learning Credit. The course may not even be related to your work in order for you to receive credit.

 

  1. Initial business expenses lower taxes.

If you have started your business this year, then a significant portion of the money you spent can be converted into tax deductions. That may include (but is not limited to) the cost of equipment, machinery, the advertising budget and marketing; it can even include the amount you paid for office supplies.

 

  1. Paying Social Security in full means lesser taxes.

If you are self-employed, then you tend to pay social security taxes both as both the employer and an employee. If you pay in full for both contributions, you’ll save a considerable amount of reduced income tax.

 

  1. Jury duty reduces taxes.

If you were summoned as a member of a jury this year, your participation could lead to a tax deduction.

 

  1. Purchasing before tax time might mean lower taxes.

If you have bought a valuable item for your business before filing your taxes such as a new laptop or a new smartphone, these items can be tacked onto your tax report as a business expense. Note that the deduction will not match the actual purchase value because of depreciation.

 

  1. Join a flexible spending account to lessen taxes.

Through a flexible spending account, an employer gets a portion of the employee’s salary for expenses like health care or childcare. This portion reduces the employee’s taxable income which will lower taxes.

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MKS&H

MKS&H is committed to providing personalized tax and accounting services while developing a deep understanding of you, your culture, and your business goals. Our full view of financial systems and the people behind them allow us create and evolve the best solution that will help you and your business thrive. The accounting experts and consulting professionals at MKS&H work together to help you achieve the financial results you want.

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