Tax bills can be stressful, and it may be tempting to procrastinate—don’t give in to that temptation. By thinking ahead and working with an expert, you can turn the hassle of doing your taxes into an opportunity to keep some of your hard-earned income in your pocket where it belongs. Tax professionals – like the experts at Insogna CPA – can help you minimize your taxes as much as legally possible.
Here are 5 smart ways you can reduce your tax bill this year:
1. Contribute To A Pre-Tax Retirement Account
Contributions to retirement accounts like the traditional 401(k) and IRA are some of the simplest ways to reduce your tax bill. These contributions are deducted from your taxable income, reducing the overall amount of federal tax you owe. Plus, if you maximize any available employer-matching options, you’re making a serious investment in your future with those tax-deferred dollars.
2. Claim Your Business Deductions
- If you own your business, there are many tax deductions available to you. Leaving these deductions unclaimed is like leaving money on the table. You might be surprised at what you can deduct—utilities, wages, employee benefit programs, and advertising are all options. Work with your advisor to ensure you have taken advantage of every deduction you are eligible to claim.
3. Check for Earned Income Tax Credit (EITC) Eligibility
The Earned Income Tax Credit is a benefit for those with lower or moderate income and may reduce the amount of tax you owe—especially for families with children. The exact amount varies based on your income, marital status, and number of children, but if you qualify, you could see a significant reduction in your tax bill, and in some cases, an increased refund. Check to see if you qualify.
4. Charitable Contributions
Another popular way to reduce your tax bill is to donate to recognized charities. Depending on the amount you donate, you’ll need to demonstrate proof of your charitable donation with either a receipt or a written acknowledgment from the organization. Despite the hassle of record-keeping, these donations can add up and save you a bundle come tax time.
5. Collaborate With A Tax Professional
For complex tax returns, there’s no substitute for working with a professional. Free software can help if your taxes are simple, but if you own a business, are self-employed, or have significant assets, you’ll want an expert’s help. A qualified tax professional like a CPA will stay up to date with changing tax laws and help you make the most of your income, assets, and overall financial situation.
Let’s Cut That Tax Bill Together!
This list isn’t exhaustive, but it gives you an idea of what’s possible. Partnering with an experienced CPA firm like Insogna CPA means working hand-in-hand to legally minimize your taxes. Don’t wait around—waiting too long risks leaving money on the table or incurring penalties from the IRS.
Ready to save? Contact us today and let’s get started!
