Tax Strategies with Merra Lee Moffitt

Help Me With My Tax Strategies

Tax Strategies with Merra Lee MoffittFirst of all it’s important to know the basics for creating tax strategies seeking to minimize your taxes. There are three basic ways to reduce your taxes and have more of your money for yourself and your family. So we will look at these.

One is to reduce your adjusted gross income. You know that the more you make the higher your tax rate, and when there are two of you making a decent income putting two and two together can be just what Uncle Sam wants. It’s important to keep a handle on your income throughout the year and forecast your joint income. This is just one part of your tax strategy.  It goes without saying, “The goal of tax strategy and planning is to manage your finances to minimize your taxes.”

The next part of your tax strategies is to increase your deductions. What are some of the deductions you might ask? They include expenses for health care, state and local taxes, and personal property taxes. Don’t forget car registration fees. There’s mortgage interest, gifts to charity, and job-related expenses like unreimbursed mileage. Even tax preparation fees are deductible, and don’t forget those investment related expenses. The key is to keep track of all of your expenses throughout the year so you don’t forget even the smallest expenses. Every penny counts.

Of all of these adjustments to your adjusted gross income, the three biggest deductions are mortgage interest, state taxes, and gifts to charity.

The last way to save on your taxes is with tax credits. So you have tweaked all your taxable income but what about tax credits. There are tax credits for college expenses, saving for retirement and adopting children. Ok, maybe you aren’t in a position to adopt a child but everyone could benefit from taking some classes at a local college. There’s the Hope Credit for students in their first two years of college and the Lifetime Learning Credit for anyone taking college classes, and the classes don’t even need to be related to your career.

Finally, one more tip is to increase your withholding. By increasing your withholding and paying more throughout the year, you don’t have the impact of owing come April 15th.

Let us know if these tax strategies have been helpful.

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