Watch this 17-minute video from Sean Standberry of Lyfe Accounting. Below is a synopsis of his strategies. Reach out to Tracy's Tax Services to see how you can take advantage of any of these strategies.
Standard Deduction vs. Itemized Deduction
Itemizing lets you cut your taxable income by taking any of the hundreds of available tax deductio
ns you qualify for. The more you can deduct, the less you’ll pay in taxes.
Should you itemize or take the standard deduction?
Here’s what the choice boils down to:
If your standard deduction is less than the sum of your itemized deductions, you probably should itemize and save money. Beware, however, that itemizing usually takes more time, requires more forms and you'll need to have proof that you're entitled to the deductions.
If your standard deduction is more than the sum of your itemized deductions, it might be worth it to take the standard deduction (and the process is faster).
The standard deduction has gone up significantly in recent years, so you might find that it's the better option for you now even if you've itemized in the past. Your tax software or tax advisor can run your return both ways to see which method produces a lower tax bill.
Strategies to Reduce Your Taxable Income
Vehicle Sale, Property Taxes
Mortgage Interest Payments
Solar Energy Systems (Solar Heating Systems, Solar Panels)
Qualified Education and Educator Expenses
401K or IRA Contributions
Qualified Medical Expenses
Health Savings Account
Child Tax Credits and Dependent Care Tax Credits
If you want to see 20 ways to reduce your taxable income for 2022, check out this article by Nerd Wallet.
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