Tuesday, February 16, 2016

Taxable Income

                                          Some ideas for lowering your taxable income:

- Contribute pre-tax to a 401(k), traditional IRA, SEP, SIMPLE, or similar retirement plan
- Contribute to a flexible spending account (health care and/or dependent care)
- Take advantage of a tax-deductible plan for commuting expenses if your employer offers it
- Switch to a high-deductible medical plan and contribute pre-tax to a health savings account (HSA)
- Consolidate your deductible health care expenses and/or your deductible miscellaneous expenses into the same year so you can exceed the minimum deductibility levels
- If you're a teacher, deduct up to $250 in supplies you bought for the classroom
- Go to school. You can deduct up to $4000 in tuition and fees.
- Donate cash or non-cash goods to your favorite charity.
- Buy real estate. Deduct the mortgage interest and pay "points" for an instant deduction.
- Take a capital loss for stocks and other investments that have lost value.
- Invest in tax-exempt bonds and tax-efficient mutual funds to reduce taxes on dividends and capital gains
- Defer income until the next year if possible.

Not recommended:
- Ask your boss for a pay cut.
- Get a divorce. Alimony payments are deductible.
- Move to a high-tax state.
- Have lots and lots of kids. Both deductions and credits on this one...

Please Note: I am not a tax expert and these are just suggestions. Thanks and have a Great Cheap Cheetah Day!

No comments:

Post a Comment