{"id":489,"date":"2019-04-02T15:54:29","date_gmt":"2019-04-02T15:54:29","guid":{"rendered":"http:\/\/momsnetwork.com\/workathomeblog\/?p=489"},"modified":"2019-04-02T21:05:16","modified_gmt":"2019-04-02T21:05:16","slug":"nine-often-overlooked-ways-to-legally-keep-more-revenue-for-yourself","status":"publish","type":"post","link":"http:\/\/momsnetwork.com\/workathomeblog\/2019\/04\/02\/nine-often-overlooked-ways-to-legally-keep-more-revenue-for-yourself\/","title":{"rendered":"Nine Often-Overlooked Ways to Legally Keep More Revenue for Yourself"},"content":{"rendered":"\n
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Save Money On Taxes<\/figcaption><\/figure><\/div>\n\n\n\n

Small Business Owners, Stop Overpaying on Taxes!
<\/strong>
Eric Tyson, MBA, author of the new book <\/em>Small Business Taxes for Dummies\u00ae<\/sup>, Second Edition, shares some great tax breaks you may not be using<\/g> to your advantage.<\/em><\/p>\n\n\n\n

          Hoboken, NJ <\/strong>(March\n 2019)\u2014If you’re a small business owner, you know: The quest for revenue\n is never-ending. That means, besides chasing new customers, you’re also\n scouring your expenses to see where you might make cuts. Eric Tyson’s \nsuggestion? Focus on minimizing one of the biggest (and sneakiest) \nexpenses you face. Taxes. <\/p>\n\n\n\n

          “Quite often, small business owners overlook some great tax reduction opportunities,” says Tyson, author of\n Small Business Taxes For Dummies\u00ae<\/sup>, \nSecond Edition<\/a><\/em> \n(Wiley, March 2019, ISBN: 978-1-119-51784-9, $26.99). “Yes, we all have \nto pay taxes, but there’s no reason to overpay. Employ legal tax \nreduction strategies, send less to Uncle Sam, and you’ll automatically \nkeep more revenue for yourself.”<\/p>\n\n\n\n

          Keep reading to learn nine things you can do this year to improve your tax situation: <\/p>\n\n\n\n

Invest in wealth-building assets. <\/strong>During\n your working years, you probably don’t need or want taxable income from\n your investments, because it can significantly increase your income tax\n bill. So, Tyson advises investing in real estate, stocks, and small \nbusiness investments. These offer the best long-term growth potential. \nThey are a tax-friendly option as well, because you’re in control and \ncan decide when to sell and when to realize your profit. Hint: As long \nas you can hold on to these investments for more than one year, your \nprofit \nis taxed at the lower, long-term capital gains rate. <\/p>\n\n\n\n

Fund some retirement accounts. <\/strong>When\n you funnel your savings dollars into retirement accounts, such as \n401(k), 403(b), SEP-IRA, or SIMPLE IRA, you can earn substantial upfront\n tax breaks on your contributions. <\/p>\n\n\n\n

“If\n you think that saving for retirement is boring, just consider the tens \nof thousands of tax dollars these accounts can save you during your \nworking years,” says Tyson. “And if you don’t take advantage of these \naccounts, you may well have to work many more years to accumulate the \nreserves necessary to retire.”<\/p>\n\n\n\n

Contribute to a health savings account.<\/strong>\n HSAs hold promise for people to put money away on a tax-advantaged \nbasis to pay for healthcare-related expenses. Money contributed to an \nHSA is tax-deductible, and investment earnings compound without tax and \naren’t taxed upon withdrawal so long as you use the funds to pay for \neligible healthcare costs. So, unlike a retirement account, HSAs are \nactually triple tax-free!<\/p>\n\n\n\n

Calculate whether a deduction is worth itemizing. <\/strong>The\n IRS gives you two methods of determining your total deductions. You can\n either choose the standard deduction method, or you can choose to \nitemize. Standard deductions make sense if you make a regular paycheck, \nhave a rented apartment, and have no large expenses. In 2019, single \npeople qualify for a $12,200 standard deduction, and married couples \nfiling jointly get a $24,400 standard deduction. <\/p>\n\n\n\n

The\n other deduction method is itemizing. This procedure is more of a \nhassle, but if you can tally up more than the standard deduction amount,\n itemizing saves you money. Your personal property and state income \ntaxes are itemizable, up to an annual cap of $10,000. Further, if you \npay a fee to the state to register and license your car, you can itemize\n the expenditure as a deduction. (However, you can deduct only the part \nof the fee that relates to the car’s value.) Because you can control \nwhen to pay \nparticular expenses that are eligible for itemization, you can shift \nmore of them into selected years to take full advantage of itemizing. \nHowever, if your itemized deductions are equal to or less than the \nstandard deduction, take the standard deduction.<\/p>\n\n\n\n

Trade consumer debt for mortgage debt. <\/strong>Suppose\n you own real estate but haven’t borrowed as much money as your lender \nallows. And suppose you’ve run up high-interest consumer debt. In that \ncase, you may be able to refinance your mortgage (borrowing at a lower \ninterest rate than your credit card bill) and pull out extra cash to pay\n off your consumer debt. You may even get a tax-deduction bonus, because\n while consumer debt isn’t tax-deductible, mortgage debt usually is. <\/p>\n\n\n\n

“Remember\n that refinancing your mortgage and establishing home equity lines \ninvolve fees and charges,” says Tyson. “Keep these expenses in mind when\n weighing the pros and cons of this strategy. Also, be aware that \nborrowing against the equity in your home can be an addictive habit that\n can handicap your ability to work toward other financial goals. Stay \nresponsible.”<\/p>\n\n\n\n

Consider charitable contributions and expenses. <\/strong>When\n you itemize your deductions on Schedule A, you can deduct contributions\n made to charities. Most people already know that when they write a \ncheck to a college or house of worship, they can deduct it. Yet many \ntaxpayers overlook the fact that they can also deduct expenses while \nperforming activities for charitable organizations. For example, when \nyou go to volunteer at a soup kitchen, you can deduct your \ntransportation costs getting there. You can also deduct the fair market \nvalue of donations \nof clothing and other goods to charities; just keep your documentation \nof donated items. Finally, you can deduct contributions to local \nschools, including youth sports programs, as long as the money goes to \nthe overall team rather than being earmarked for your child. You can \neven deduct the cost of driving your kids to school events. <\/p>\n\n\n\n

Scour for self-employment expenses.<\/strong>\n If you’re self-employed, you already deduct a variety of expenses from \nyour income before calculating the tax that you owe. When you buy a \ncomputer or office furniture, you can deduct those expenses. Employee \nsalaries, office supplies, rent or mortgage interest for your office \nspace, and phone expenses are also generally deductible. <\/p>\n\n\n\n

“Although\n more than a few business owners cheat on their taxes, some \nself-employed folks don’t take all the deductions they should,” says \nTyson. “Be sure you take advantage of deductions for which you are \neligible.”<\/p>\n\n\n\n

If you’re part of a married couple, crunch the numbers on filing separately.<\/strong>\n About 5 percent of married couples file their federal income tax \nreturns under the status of “Married Filing Separately.” Most do so to \nsave money, but there can be other reasons, such as each spouse not \nwanting to be liable for their spouse’s tax transgressions. To know if \nyou should consider this option, crunch the numbers. Couples with the \nfollowing characteristics may benefit: <\/p>\n\n\n\n