Assuming that no too big a change happened in your financial life in 2017, you must be pretty set for the April 17th deadline. However, if you have had a change in job, got married, had a kid, or even brought a home, things can get a little more complicated. Thanks to the randomly changing tax codes, the returns you fill in 2018 and beyond are going to take a lot of work.
It doesn’t matter if you are an individual job holder or the owner of a small business, your tax situation is changing. The best way forward is to equip yourself with the information and know exactly what you are paying and for what. Here are some tools and tips that should help you out:
1- Retirement Account Calculator
The one thing that hasn’t changed and will possible remain untouched is your ability to save money on taxes by contributing to your retirement account. Adding more to a retirement allows you an instant tax break and subsequently, a tax free withdrawal when you are retiring. This can be seen as a powerful investment for your future that saves money in the present.
2- Tax Deadlines
The only way to stay a step ahead of the IRS and not letting them come to your home is to meet all your tax deadlines. There are a number of dates spread across the year, depending on the job you have, mortgages you fulfill and the business you run. Sticking to these deadlines also saves you money on penalties that the IRS will run after!
3- Savings Growth Calculator
A savings growth calculator such as this will help your quickly determine the growth of your investments. Using the calculator is easy and all you need to fill in are basic information like initial amount, monthly deposits, interest rate and time period. Longer time periods for savings accounts allows you more savings in current tax amounts too.
4- Miles Calculator
For individuals who own a personal vehicle, miles calculation can surprisingly help you save on taxes. The calculator helps document your car related expenses including insurance, maintenance, depreciation and even gas. A portion of this cost can be deducted from your business miles! Another option here is a standard miles deduction that allows you a flat rate of tax deduction every year (the rate changes).
5- Health Savings Account
For those qualifying for a highly deductible health insurance, HAS can be a great advantage. HSA is always funded with pre-tax income and allows you a generous deduction in taxes. This money can be withdrawn or used for regular health expenses you have. In case, you are not using it regularly, the savings in HAS can accumulate as an investment and can be withdrawn in full when you retire.
Money is hard earned and paying taxes is not something we look forward to always. We hope that these tools will help in 2018 and ahead. Both individuals and businesses are in the misconception that there is little scope with tax savings. However, as you can see above, there are several tools and allowances that help you retain more of your income. It just needs a little research and year round dedication. We hope that these will help you in the next financial year.