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Trimming Your Taxes
by Kimberly
Danger
Many Americans dread filing their
taxes, especially if it involves writing a big
check to Uncle Sam. Make this the year you get
a grip on your taxes. Here are some simple
things you can put into practice this year to
avoid a tax bill that gives you sticker shock
later on.
Save for Retirement
Setting money aside in an IRA or
your employer’s 401(k) or 403(b) benefits you in
two ways. It not only helps you save for
retirement, it gives you a valuable tax break.
Money socked away into a retirement account
reduces your adjustable gross income, which
means you’ll be taxed on less than what you’ve
actually earned.
Take Advantage of Your Flex
Plan
Take advantage of your employer’s
flexible spending plan. A flexible spending
plan allows you to pay for dependent care and
health care with pre-tax earnings. Daycare,
medical expenses, even eyeglasses and contact
lenses and are examples of what you can use this
account to pay for.
Use a Tax Advisor
Many people prepare their taxes
themselves simply to avoid the expense of hiring
a tax professional. However, a qualified CPA
can help you find missing critical deductions
and tax credits that you may not be aware of.
This can actually end up saving you money in
the long run. Your CPA may also be able to give
you valuable advice for moving forward with your
financial plan.
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