How To Decrease Your Tax

Everyone has to pay tax, it is against the law to evade paying tax and it is penalized in a court of law. There are very many ways we pay taxes; some are salient that may go unnoticeable while others are very high as to be felt by the local citizen. This taxes we pay are used by the government to run its various departments. We never pay the same amount of tax, you will find that some people pay huge amount of tax while some pay as low as possible. There are ways you can lower the amount of tax you shell out to the government. One of the best ways to reduce the amount of tax you pay is by maximizing on your deductions.

Maximize Tax Deductibles

Maximizing on your deductibles will help you get huge sums of money inform of tax returns. It is never easy to get the tax returns however, if you learn the proper tips of how you can go about then you will find it easy. Let me give you a few tips that will enable you maximize on your tax deductibles and in the end you will find that you will be paying low amount of tax. 

What is Tax Deductibles

The first and most important thing is to know what deductibles are; deductibles are those funds that are deducted from your expenses like medical expenses and mortgage. After you have an idea of what deductibles are you are required it is recommended for you to make a list of the various deductibles that you can think off. Note down separately, all those deductibles that apply to your case. Some of the deductibles that you can select include: medical expenses, property taxes, real estate taxes mortgage interest taxes, charitable contributions among many more. After listing down all the deductibles that apply to you the next thing is for you to learn how to use this deductibles to earn you tax refunds.

Advantages

Let us take for example medical bills that apply for all tax payers. You should always keep the receipts of all the medical expenses you incur be it prescription drugs, doctors consultation fee or any other medical cost. These are deductibles that can be deducted from your annual tax and be refunded. However, this is only possible if your medical bill does not reach a certain percentage of your adjusted gross income. 

Another example is the charitable contributions that you give to the NGO. Whether the contributions are inform of cash or items they are still deductible. The best thing you have to do is to keep a receipt of all the contributions you have made, during auditing avail them to see if they are deductible since there are certain limitations involved.

For your deductibles to be deducted they have to reach a certain limit set by the government however if they don’t you have the provision to itemize all your deductibles. It is clear that keeping record of your deductibles and maximizing on them is a good way of lowering the tax you pay. If you want to lower your tax even further then talk to a professional.