Tax Refunds & Advice

Do you want to pay less in taxes next year? If so, there are three simple ways that you can do this. Although you will still owe some money to the IRS, less is always better, right? Listed below are three simple ways that you can lower your taxes without having to take any drastic steps:

1. One of the most important factors in determining taxes is your adjusted gross income. Simply put, your adjusted gross income consists of all of your income minus any adjustments. By looking at your tax forms from last year, you will get a good idea of what your adjusted gross income usually works out to. The more money you earn the higher your adjusted gross income. And the higher your adjusted gross income the more taxes you pay. By lowering this number, by doing things such as contributing to a retirement account, you can also bring down the amount that you owe in taxes.

2. Although almost every taxpayer can take a standard deduction, you may want to look into itemizing if it will work to your advantage. Itemized deductions can include but are not limited to mortgage interest, student loan interest, charitable contributions, job related expenses, and health care expenses in many cases. The more deductions that you can find the less you will be taxed on.

3. Tax credits are available, and you need to take advantage if eligible. Generally speaking, tax credits are meant to reduce your tax. They are available for things such as adopting a child, saving for retirement, and college expenses.

If you take advantage of any of these tips, you should be able to lower your taxes. And when you do this, it means more money in your pocket.