U.S. taxes in short
The subject of taxes can be somewhat unnerving and complicated for many people – but the one thing that most people agree on is that they’d like to pay less tax. Thankfully, there are a variety host of bona fide ways in which you can minimise the amount of tax you are required to pay – but, as ever, it’s all about getting the right advice according to your specific financial requirements. And this is where deVere comes in.
So, what are the basics that you need to know about U.S. taxes if you want to save money and earn more? What can you do today to mitigate your U.S. tax burden? The following are some tips that could help you spend less on taxes each year.
Take Advantage of Energy Efficiency Credits
If you have not done so yet, check out the latest in energy savings tax credits. These change often. They are available through both the federal government and through local taxing authorities (check out your state, too.) You’ll need to invest in the specific requirements stated, but in the long term, you’ll reduce your costs in energy and up your tax savings.
Learn How to Earn Tax-Free Income
There are various types of income that are tax-free. That is, you do not have to pay taxes on this income. Find out if you qualify for these or work toward earning some.
Sell your home. The sales tax exclusion will then apply.
Save money for your children’s education in an approved account.
Contribute to your health savings account.
Get health insurance from an employer or other plan.
Invest in municipal bonds.
In all of these areas, you’ll be earning money that you do not have to claim as taxable.
Use All of the Tax Credits You Qualify For
There are many tax credits, and taking advantage of as many of them as possible is key to saving money. Check out these options you may qualify for:
Buy a hybrid car if a tax credit is available for it.
Take advantage of the child tax credit.
Get all of the education tax credits you qualify for.
Get the child care tax credit by using an authorized care provider.
These can reduce your tax bill dollar by dollar. They are well worth investing in if you need these services.
Invest in Your Retirement
The next step is to max out your contributions to your retirement accounts. Depending on the type of account you have, you may be able to see a significant tax reduction simply by tucking away as much money as the government will allow for that year. And, watch out. If you are over the age of 50, you may be able to make catch-up investments, allowing you to reduce your tax bill even further.
In addition to these tips, U.S. tax savings come from much more. Reduce your tax rate when possible. Make sure you get all of the tax deductions you qualify for, including mortgage interest, property interest and charitable tax donations. Be sure to claim all of your expenses if you are a business owner. It is possible to reduce your tax bill considerably, especially when you take advantage of as many credits and deductions as possible.
The subject of tax can be a daunting one, but by consulting with a qualified wealth management professional you can potentially become considerably more tax efficient. At deVere, our overarching priority is to provide the highest quality financial advice for our clients to ensure that they’re on the right track to reach their mid to long-term financial objectives.