For most Americans, they spend the first 4 months out of the year working just to pay their taxes for the rest of the year.

See Article on CNN
http://money.cnn.com/2007/03/27/pf/t...ion=2007032811

How do you (legally) reduce your tax bill?
(For those in other countries, it might be an idea to list the country name first because the tax laws are different)

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Know what you can and cannot deduct. It is different for different people in different situations, so it really pays to visit a CPA if you itemize or have a more complex tax situation. He or she can tell you what you're entitled to deduct. Sometimes you're even entitled to a refund for recent years in which you've missed certain deductions.

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I agree that a good accountant can help you figure out all your deductions, how to save some money etc

Find a good tax person and have them complete an itemized deductions form. If you look around you can find someone who will do your taxes at a great rate. We have a book keeper do our taxes. She does at great job for $100 and that includes State, Federal and City tax forms with all itemized forms. All the chains in our area want over $300 for the same job.

Also if you taxes on your home go up due to a new assessment on the value of your home you have the right to fight it...but it is best to have a professional assessment completed to back your claim.

Jen

Have more kids! LOL just joking... the kids cost more than the extra exemption and tax credits.

I agree to go over your info with a CPA. There are new deductions every year and they know the ins and outs.

Guess I'm glad I don't live in Conn.

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How do you legally reduce your taxes?

Earn less money. Honestly. That's what we did.

When we lived in California hubby and I were both working fulltime professional jobs. We were pulling in so much money it got to the point where you see what the president of the USA makes and you think, "Wow, he doesn't make very much." Yet our standard of living was FEELING barely above scraping by. We had a dinky house on a dinky lot. We were spending almost all of our time commuting and when we weren't sitting in our cars in a line, we were standing in a line. So we quit.

I quit working and we moved. My husband went to working 1/2 time (he now works 3/4 time). We have a house that is more than double than the one we had before and our lot is no longer calculated in square feet. We enjoy time together. When hubby is home, he is home fulltime. Right now the three of us are sitting in the livingroom and hubby and DD are buildng with blocks. We could have never done this the way we were living before.

How else?

Take advantage of every pre-tax benefit you can. Fully fund your 401k. If you don't have a 401k, fully fund an IRA. Fully fund tax-free college funds, too. Open a medical savings account. My husband's employer doesn't offer one so we have a private one through a local bank. When you take advantage of pre-tax benefits you not only save on income taxes but you pay less into the social security system, too. Keep in mind that the social security / medicare tax is the HIGHEST tax we pay - and the percentage is fixed.

When you invest your money, use tax free or tax delayed vehicles like bonds. Be careful about mutual funds that tend to hit you with tax withdrawls even though you haven't realized the gains.

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"I've been rich and I've been poor but independently wealthy is where it is at."

Save receipts for all expenses related to school, even if it is a 20 cent bottle of glue! It all adds up! Save receipts for all medical related expenses, includeing over the counter drugs, band aids, hearing aid batteries, etc. Make sure you get a reciept for all donations. Save receipts for all uniforms and work shoes. Can you tell, I save alot of reciepts!!

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~Happiness is a large family~

Just wanted to add this just in case you didn't know about it Every little bit helps!

Long-Distance Telephone Excise Tax Refund:
Long-Distance Telephone Excise Tax Refund

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Oh, yeah, make sure you save receipts from your auto registration too!!!

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~Happiness is a large family~