11 Things You Must Do to Reduce Your Taxes for Next Year

As a personal finance advisor, lots of time people ask me " How can I save money on taxes?" This is really critical to answer in a...

As a personal finance advisor, lots of time people ask me "How can I save money on taxes?" This is really critical to answer in an easy way. The tax reduction strategies should be adopted by practicing good financial habits. 

 11 Things You Must Do to Reduce Your Taxes for Next Year
For most taxpayers, the immediate focus in the new year is likely to get and unite materials from 2016 before the April fever arrives. But it also makes sense to start preparing now for the fiscal year 2017. These tips can help individuals and small business owners reduce their tax burden next year, avoid audits, and feel a little better about the whole process. 

How to reduce taxable income for high earners?

If you are looking for help for considered taxable income and reduce your taxes then keep in mind these eleven things. However no one can gurentee to make it lesser, but deffinetly those things will help you. 

OPTIMIZE THE RETENTION

Although it's nice to receive a large refund after filing a tax return, it is even better to optimize tax withholding and get a little more money on each paycheck. The Internal Revenue Service has a retention calculator that taxpayers can use to calculate the correct amount of income tax to be withheld from their paychecks.

ASSESS THE CONTRIBUTIONS OF THE REMOVAL PLAN

Taxpayers may want to raise their retirement contribution rate during 2017, helping to grow a pension fund while reducing their tax bill. Investments in tax-advantaged accounts - such as a traditional IRA, 401 (k) and 403 (b) - grow on a deferred tax basis and can be withdrawn without penalty after 59 and a half years.

SAVE RECEIPTS

Hunt for work this year? Keep all receipts. There will be a deduction for everything from buying the summary paper to traveling for job interviews. This may not amount to much and applies only to the people who detail the deductions, but some expertise is needed for the search.

EDUCATE

Individuals who dedicate time and money to college and are enrolled in a postsecondary school, such as a two- or four-year college or vocational program, may be eligible for a Lifetime Learning Credit of up to $ 2,000 a year. Taxpayers may be able to claim the credit if their spouse or dependent has qualified higher education expenses.

BUY HEALTH INSURANCE

For the 2017 tax year, the penalty for not having health insurance remains the highest of 2.5 percent of family income (up to the national average annual premium for a Bronze Plan) or $ 695 per adult and $ 347.50 Per child (up to $ 2,085 in total). Although enrolling in a plan may be more expensive, it is worth avoiding for those who can. Individuals and families receive a premium subsidy if their annual income is less than 400 percent of the federal poverty level. See Healthcare.gov for qualifications based on household size and state of residence.

EVOLUTION OF LIFE

Michael Raanan, a former IRS agent, reminds taxpayers that a major "life event," such as a marriage or the birth of a child, should request the submission of a new Form W-4 to an employee. New circumstances may affect the amount of income tax withheld from a worker's salary.

PAY ESTIMATED TAXES IN TIME

Anyone who earns money through an independent job, their own business, or even interest or rental income must remember to pay federal, and (where applicable) state taxes four times a year. Failure to do so can result in costly penalties for those who expect to owe at least $ 1,000 in taxes.

KEEP SEPARATE BUSINESS ACCOUNTS

Anyone who starts a business should consider opening business credit cards, checks and savings accounts. Keeping finances could facilitate the identification and organization of business expenses by filing a tax return, and helps provide entrepreneurs with real-time information throughout the year.

MILES

Taxpayers detailing the deductions should track how much and when they conduct medical, voluntary, or non-profit activities. Even short trips to the local pharmacy to pick up a prescription or a local charity to leave a donation can add up to a decent tax deduction. Self-employed workers can set aside many work-related trips against their business income.

REMEMBER OTHER EXPENDITURE

In addition to keeping an accurate mileage record, business owners should keep expense reports for all other types of shopping, travel, and business-related meals (note the names of the meal partners and the purpose of the meeting). A shoe box filled with paper receipts could be a pain later, so this year to get organized, maybe help with an application.

DOCUMENT ALL

Take notes and keep documentation of everything. It is important to have evidence of events and expenses if necessary, as it can sometimes be difficult to remember details. This is particularly important for events occurring at the beginning of the year, which can be forgotten when it comes time to submit returns for 2017 next year.

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