Tax day is upon us, and even though you can’t go back and plan better throughout this past year, you can look ahead and begin planning better for next year’s tax day. Here are some tax planning tips and strategies to help lessen the pain next April.
- Begin by calculating your gross income. Next subtract your deductible expenses, and the figure you are left with is your net taxable income. To get your taxable income as low as possible, you want to aim to minimize your gross income and maximize your deductible expenses.
- To lower your gross income, you can use a retirement plan or defer income, and by deferring income, you transfer money to another tax year, thus saving money this year. An example would be deferring stock market gains. Both of these options help you save money and lower your gross taxable income.
- Use tax preparation services to help find as many tax deductions as possible. It is likely that there are many available that you are either unaware of or haven’t been claiming to the full extent, and a professional tax service can help you find those.
