The Goal is To Save As Much Money as possible at Tax Time
Indeed, no taxpayer wants to pay money at tax time. There are certain credits and deductions created for you, the tax payer to pay less or get back a nicer refund amount. Understanding the laws and tax code can make tax prep easy. Here are 2 ways to reduce burden or put more money into your pockets:
Option 1 Update Your W4
As a tax professional, I’ve seen this scenario all the time. One is, a client gets the shock of his/her life and see a huge tax liability. We then discover, their withholdings were very little. Moving forward, I advise my client to go to their employer and update his/her W4. Sit down and calculate how much money you want withheld from each paycheck. To be on the safe side, you should update your W4 yearly to adjust to your life events. Line 4c is where you request extra taxes to get withheld from paycheck. This can allow for bigger refund or less owed. Play smart! Beat the system the legal way. Stop throwing money away.
Option 2 Start A Side Business
In addition, If you work a 9-5 and added a side business last year, you may be in luck. You must prove your business is not a hobby. Hobbies cant deduct. The key is to have had a strong system in place (Excel or QuickBooks) to track all income and expenses. You add all eligible deductions on your schedule C and if you owed, you might see liability dropping. One year , I had enough business deduction to reduce my liability to 0 and I got a mini refund. The game is to figure out strategies and understand tax codes to win at tax time 𝘁𝗵𝗲 𝗹𝗲𝗴𝗮𝗹 𝘄𝗮𝘆.
In conclusion, hope these strategies give you some relief this tax season. Remember, when in doubt, always refer to www.irs.gov for any questions you may have will preparing your taxes. I also recommend 2 books to help if you are a small business. This has helped me over the years. If you have a complicated situation, hire an experienced tax professional.
Book #1 Small Business Deductions
Book #2
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