Last Updated on Mar 5, 2020 by James W
That time of the year is just around the corner when you are expected to fill in your tax liabilities and pay the IRS the amount that you owe to the government. The IRS is not an emotional organization that will wait for you to complete your taxes or it will consider the fact that you were preoccupied with other tasks. Ready or not, officials will contact you about your taxes.
We all have heard that there are multiple schemes and ways that can enable you to save taxes but it becomes very difficult to keep track of all these beneficial schemes and methods. This is where a tax attorney can help you out. Not only can he help you save money but he can also do all the official work related to paying your taxes. Here are ten ways that the tax lawyers will tell you for saving on your taxes.
1. Charitable Donations: The IRS recognizes itemized deductions on taxes related to the gifts you might have given to charitable organizations. Your tax attorney will know which are the qualified charitable organizations, donations to whom will reduce your tax liabilities.
2. Contributing to 401k: Tax attorneys are well informed on the schemes by the government that help the U.S. citizens save on their tax liabilities. One such scheme is investing in the 401k retirement account. If you are putting money in this account then you can reduce your taxable income and thus save on payable tax.
3. Maximizing your deductions: The amount of tax you save depends on the number of deductions that you have in your tax sheet. Thus maximizing your deductions in the form of mortgage interest, medicals expenses, property taxes, etc. will enable you to lower your tax liabilities.
4. Earning a tax free income: The more you earn the more you pay taxes. However a tax lawyer knows the ways to earn an income that is not taxable.
5. Contributions in the Flexible spending account: you can contact an IRS lawyer to know how a flexible spending account can help you reduce your tax liabilities. Basically it is collaboration between your employer and you depending upon the amount of money you are ready to cut from your income.
6. Gaining tax credits: The IRS upon instructions from the government adds new tax credits each year that can be used by the U.S. citizens to reduce tax liabilities. These are certain financial activities that enable you earn tax credits that can be spent in paying your taxes.
7. Medical bills payment: You can also deduct some of your medical and dental expenses from your taxable income and reduce the tax amount.
8. Sell the investments that are incurring losses
9. Reduce the rate of tax applicable to you
10. Shifting your income to a child.
There are many methods that enable you to save on tax. You might not know about all these methods. For instance the last three methods are no so popular and you will need to consult or hire a tax lawyer. Moreover the laws governing the IRS and tax liabilities keep changing and it is difficult for a common citizen to keep himself abreast with all these changes. Therefore you need a tax attorney to help you out more often than you think.
