Twice I've asked members of this board to check to see how much their actually paying in taxes. I've seen multiple threads started on tax refunds and the 'incentive checks', but I'm wondering how many people are truly aware of how much money they PAY in taxes in the form of federal, state, local payroll withholding, property taxes, sales taxes, miscellaneous taxes (like entry fees to public parks or car registrations), and Social Security and Medicare. What percentage of your income is taken from you by the government?

This is a serious frugal question because I see lots of posts about people worried over what they are buying at the grocery store or spending at the gas pump, but so few people are even thinking about one of the biggest impacts to our budget - taxes.

Taxes aren't a fixed expense. There are many money management moves we can make to pay less. A small shift in your tax situation can make more of an impact to your financial well-being than using coupons!

Are we so busy watching pennies that we forget to watch the dollars?

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"Poor people work for their money. Rich people make their money work for them."

I think a lot of us (or at least me) are a little confused by taxes and really don't even know where to begin. I have a friend, who is an accountant, and I was amazed at how much she donated to causes she wants to and how much she gets back in returns. I'm not even sure where or how to even begin doing that. Though maybe asking my friend would be a start.

But Cookie - keep posting about taxes. I may not respond but I do read them!

This is why I think it's important to hire a good CPA if your tax situation is complicated at all. Yes, they cost more than doing it yourself, but like with most things you get what you pay for. They can provide great advice on how to restructure things in the future to maximize your financial situation.

Melsb - yes, charitable donations are tax deductible. They don't necessarily mean you'll get more back on your return but they can help bring your taxable income down, which is typically the main goal.

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This is why we have a CPA, he does a wonderful job and is always helpful on finding ways to benefit us financially!! He is one reason we are able to keep our tax bracket percentage at a decent level.

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