by Karla Dennis | Jan 1, 2014 | Blog
Many businesses offer employees all kinds of benefits that fit into a smart tax strategy. If you are looking to save money on the amount of money that you pay in taxes, there are a few things benefits that you should convince your employer to adopt as part of a tax strategy. First, adopt a pre-tax childcare credit. That $5,000 that you pay toward childcare can easily convert to over $7,500 when paid after taxes. By using a pre-tax childcare credit provided by your employer, you won’t have to pay taxes on money that is already an earmarked expense. It’s a tax strategy that will help you out before that return even comes in the mail. Another important tax strategy offered by an employer is your health benefits. Have you ever thought of your health benefits as a tax strategy? It’s true. All of the money that you put into health insurance comes out of your paycheck before taxes. If you have chosen to forego health insurance, you should know that it is actually cheaper to pay pre-tax health insurance than attempt to pay all of your doctor bills out-of-pocket. Finally, working with your employer to establish a Roth 401K is also a great tax strategy. In a regular 401K your savings are taken out of your check before taxes. With a Roth 401K the money is taxed at a lower rate as you put it into a savings account. It may seem like there is an advantage to putting off taxes until later, but you should know that your 401K will be charged taxes at the higher rate...
by Karla Dennis | Dec 28, 2013 | Blog
Teachers pay more out-of-pocket expenses than any other job, and they don’t make nearly enough to cover those costs. That is why having a tax strategy that accounts for the money you spend will actually save you money in the end. Read on to learn more about a basic tax strategy for teachers. First, as part of your tax strategy keep records of all of the costs that you use in your classroom. If you buy treats for your class, keep records of the cost. If you buy prizes, posters, or copies, keep records of all of your expenses. If you don’t report all of your losses as a teacher, you are paying more for any extra items that you buy because you are buying them after taxes. For example of the way this tax strategy works, say that you spend $40 on supplies for your classroom. You may think that it is just $40, nothing more. If you report the loss, the money that you spend on taxes will not figure into the amount of money that you pay on supplies. On the other hand, if the supplies you purchased were paid for after taxes, the cost of the supplies will actually take at least $50 out of your paycheck because you are paying taxes on money you don’t get to take home. One of the main parts of your tax strategy is to take solid records of anything that you use for your classroom. You should always keep receipts of anything that you buy for the classroom. With each cost you should also notes of the exact...
by Karla Dennis | Dec 25, 2013 | Blog
Join Karla Dennis as she goes over the 4th key to getting more cash out of your taxes.
by Karla Dennis | Dec 24, 2013 | Blog
If your total earnings put you in a low-income tax bracket, there is a tax strategy that you can form to help put more money into your pocket. Taking time to form a tax strategy will help increase the money that you make in each paycheck. For example, did you know that most people overpay on their taxes? The problem with waiting for a hefty tax return is that you are basically giving the government a loan where they can invest your money and make a profit. Why not have a tax strategy where you use that money to increase your wealth? All you have to do is fill out your tax information again, including any new deductions. It’s a tax strategy that basically gives you a raise. Another tax strategy to reduce your taxable income is starting a retirement fund. A 401K or other retirement savings is exempt from taxes as long as you don’t use it. If you use the funds early, you will be charged fees and taxes. As long as you are saving for retirement, you can decrease the amount of money that qualifies as taxable income. It is a great tax strategy to reduce the amount of money that you pay in taxes while saving you money. Finally, include your health care costs in your tax strategy. Many employers offer flex plans where you can put aside money to pay medical bills. The money that you put into a medical flex plan and a health insurance plan is not considered taxable income. Many people think that they can’t afford a good health plan, but...
by Karla Dennis | Dec 20, 2013 | Blog
For many rental property investors it feels like the money you pay toward taxes completely cancels out any profit that you make. One of the best ways to prevent exorbitant taxes on your rental property is to form a tax strategy as soon as you sign a lease for your rental property. As part of your tax strategy it is important that you understand the difference between a passive and a non-passive landlord. If you are gainfully employed and using your rental property to supplement your income, you are considered a passive landlord. One the other hand, if you use your rental properties as your main source of income, you are considered a non-passive landlord. You may wonder how knowing what type of landlord you are can change your tax strategy. Understanding the way that you earn money from your property can entitle you to specific deductions. For example, if you are a non-passive landlord, you can deduct all of your losses. If you go for a time without renters or have damage to your property, you can deduct all of those expenses from your taxable income. On the other hand, if you are a passive landlord, you can only deduct up to $25,000 of your losses each year. The good news is that you can carry over those losses into the next year. Another tax strategy for rental properties is to claim repair costs. Part of being a landlord involves upkeep and repair of a property. If you keep precise documents of repairs and their costs as part of your tax strategy, you will be able to include...
