Tax season can be daunting for many people, but it doesn't have to be. In this post, you'll gain knowledge of tax credits, tax deductions, and other tax-saving strategies that can reduce your tax liability and enable you to keep more of your hard-earned money.
TAX CREDITS
Tax credits are dollar-for-dollar reductions in the amount of taxes you owe. Some common tax credits include:
The Earned Income Tax Credit (EITC) is available to low- and moderate-income working individuals and families.
The Child Tax Credit (CTC) is available to parents of children under the age of 17.
The American Opportunity Tax Credit (AOTC) is available to students who are enrolled in college or vocational school.
TAX DEDUCTIONS
Tax deductions reduce the amount of your income that is subject to taxes. Some common tax deductions include:
The standard deduction is a basic deduction that everyone is entitled to claim.
The personal exemption is a deduction for each taxpayer and dependent.
Mortgage interest and property taxes are deductible for homeowners.
Charitable contributions are deductible for taxpayers who itemize their deductions.
Are you a Freelancer or a Self-Employed individual looking to save money on taxes?
Here's a list of a few of my favorite Self-Employment Tax Deductions:
Startup Costs Deduction
Qualified Business Income Deduction
Credit Card and Loan Interest Deduction
Mileage Deduction
Self-Employment Taxes as Self-Employment Tax Deductions
TAX SAVINGS
In addition to tax credits and tax deductions, there are other tax-saving strategies that you can use, such as:
Contributing to a retirement account, such as a 401(k) or IRA.
Investing in a health savings account (HSA).
Using tax-efficient investment strategies.
By taking advantage of tax credits, tax deductions, and other tax-saving strategies, you can reduce your tax liability and keep more of your hard-earned money.
ABOUT THE ENTREPRENEUR and WRITER
Valencia Sims is a Certified Tax Professional and CEO + Marketing Director at Georgia | Florida-based Management Consultant Firm founded in 2003, V-Source Office & Marketing LLC. Valencia Sims mentors Entrepreneurs and Professionals to make the best decision for a business or career and has volunteered time in the government and non-profit sectors. Book a Meeting.
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