Tax Saving StrategiesThere are many tax saving strategies you can follow that will help you manage your money wisely. Below are just a few of these strategies.Avoid or Defer Income Recognition Choosing to defer income until retirement could mean paying a lower tax rate on that income. Being in a higher tax bracket during working year’s means you will end up paying a higher rate on earned income. Setting up a tax-deferred retirement account can help you avoid paying the money you would have otherwise paid in taxes to increase the amount of your retirement fund. Take Advantage of Your 401(k) Opportunities Many employers provide an opportunity to invest in a retirement plan. This is usually through a 401(k). Look to defer a portion of your salary and contribute it to a tax-deferred retirement account that we mentioned above. Check with your employers about similar plans such as a 403(b). Be sure to contribute as much as possible to defer income so that you collect greater retirement assets. It is also a good idea to match (if available from your employer) the maximum amount from your employer. Defer Bonuses If you are expecting an end of the year bonus, you may be able to defer receipt of that bonus until January. Doing this can defer the payment for another year. Give to Charity If you are planning to make a charitable gift, be smart with your giving. Donate assets instead of cash to help prevent the need to pay capital gains tax on the sale. Doing this can result in significant savings, and would depend on your tax bracket and the amount of tax that would be due on the sale. Keep up with Your Miles Using your car for work does have its advantages. In 2011, the going rate was 51 cents per mile for business. A few miles here and a couple more there can become significant over the course of a year. BatesCarter provides taxation services for individuals, corporations, partnerships, estates and trusts — both foreign and domestic. Not only can we help you minimize your current tax burden, we can also assess your long-term tax potential to create a tax strategy that will help you protect your assets far into the future. If you would like to learn more about BatesCarter or would like to learn more tax savings strategies, contact us today. We look forward to hearing from you. |
Rusty Hopkins, CPA
rhopkins@batescarter.com 770.532.9131
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