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Simple Ways to Reducing Your Tax Liability

Taxes is one of those things that everyone hates doing, but it doesn’t have to be this way.
Aubrey Holt May 7, 2019
Actually learning about the current state of the tax law can be fun because it is going to help you reduce your tax liability. Here are a few tips that will help you reduce your tax liability for the year 2019.

Make Charitable Donations

The good old charitable donations can help you reduce your tax liability. This, of course, depends on how well you track your donations, you can’t just estimate numbers and tell the IRS that’s how much you gave. The IRS needs proof and without proof, you can’t deduct.

Business Expenses

Business owners should be able to reduce their tax liability by claiming business expenses. This includes things like re-investing into the business or business trips. Make sure you know the law or consult with your accountant before you go all in spending every single penny.
Businesses have a lot of advantages when it comes to reducing tax liability but it’s easier for the IRS to audit you if something doesn’t seem right. Make sure you know what is the current law.

Having a 401K or IRA

Everyone knows that having a 401k or an IRA is a way you can contribute to your future savings and save money on taxes. With these accounts, your money grows over time with the beauty of compound interest. This is a very popular way but there is a limit so make sure to consult with an expert before opening one.

Health Insurance

Getting health insurance is not only good for unexpected health problems but also helps you pay fewer taxes. Although this rule depends on if you are paying for health insurance or you are getting Medicaid. When you get free insurance you won’t benefit from this but if you pay, you qualify for a tax deduction.
There are many ways you can reduce your tax liability but these are some of the most common.

Also, make sure to consult with a tax accountant before doing anything. Who knows maybe you are able to qualify for a lot more than you think. Paying for an accountant professional pays off at the end.