A recent study found that 25% of Americans don’t understand their taxes.
This is a huge issue as it often means that they end up paying more than they should. Sometimes mistakes aren’t caught and people end up out of pocket.
If you’ve found yourself facing a huge bill, this is how to pay less in taxes.
Choose Between the Standard and Itemized Deductions Carefully
There are two types of deductions you can take when filing taxes: standard and itemized.
Most people are eligible for the standard deduction and it means you aren’t taxed on that income. Some people would rather itemize their deductions because they add up to more than the standard deduction.
Make sure you consider both and see what the best option is for you so that you can save as much money as possible.
Make Sure You Include All Expenses
Expenses will depend on the types of taxes involved in your filing, but this is particularly important for the self-employed and those who run their own businesses.
Ensuring you include all expenses is vital, as when paying taxes, you can take them off of the end sum of money that you owe.
These include home office expenses, travel expenses, office supplies, your internet bill, and more. The expenses you can claim will ultimately depend on the job you do.
Just make sure you have proof of each one. You don’t have to submit receipts with your tax forms but the IRS may ask for them.
Charity donations are tax-deductible! That means if you’ve made any throughout the tax year, you should make sure to include that on your form.
One-off donations and recurring are both acceptable, but they must be to a registered charity.
Check out this guide for more information on how to claim them.
Use a Professional
Using a professional tax preparer can be one of the best ways for you to be saving on taxes.
They know all of the laws and know what you can claim. They can make sure you get every cent you deserve.
Although they cost money to hire and this often makes people reluctant, that money is often not as much as you’d pay in taxes without them. Even if you think you’re perfectly capable of doing your taxes on your own, it’s worth trying once — you must be surprised at just how much you save!
This Is How to Pay Less in Taxes
If you’re looking for how to pay less in taxes, following these tips is a good way to start. Make sure you consider the itemized and standard deductions to decide which is best and include all charitable donations and expenses in your filing.
Using a professional is the best way to see just how much you can save!
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