How to Reduce Taxes
How to reduce taxes. Reduce income taxes, business taxes, property taxes, capital gains taxes, reduce self-employment tax and more.
How to reduce your taxes
Here are several ways to eliminate or reduce taxes:
Choose the most advantageous filing status
Do you qualify for the head of household status or the special surviving spouse status? If so, do file in those statuses. Those who are married can choose to file separate returns if it leads to more tax savings.
Reduce business taxes
Do you know that many of your expenses can be classified as business expenses, thereby making them eligible for tax deductions?
Obtain all relevant checklists. There are checklists of deductions, exemptions, credits; checklists of income that is not taxable, itemized deductions, nondeductible items, items included in gross income. Get all the checklists that can possibly be relevant to you, and make sure you deduct as much as possible.
Reduce income taxes
Free income tax advice: Note what your nontaxable employee benefits are. Employee benefits are in most cases not taxable, though in some cases taxes may be deferred. Nontaxable employee benefits include group term life insurance, noninsured sick-pay plans, group accidental death and dismemberment and related plans, dependable care assistance plans, medical expense coverage, disability income insurance.
Reduce capital gains taxes
Although tax purposes should in no way influence the basic investment decisions, tax savings are an excellent way to take the sting out of a losing position. If you are convinced that the equity you are holding has little potential for growth in the short-term, you might want to take losses.
This achieves two objectives. First, if you have any capital gains on your other securities, you can offset these gains by taking losses, thus lowering the taxable gains. Second, even if you do not have any capital gains, you can still offset up to $3000 per year or otherwise taxable ordinary income with your capital losses.