Sometimes it gets on the head when it comes to paying taxes, it is your obligation to do it timely, and this will help you to avoid penalties. Although the tax season may be over, you should get ready and start on how to reduce your taxable income for the next filing season. You should maximize your company profits, you have to work on reducing your taxable income and ensure you make the most credit, you are in the right place. Below are the guides on how to reduce your taxable income this include.
First, there is the way of pre-taxing your contribution to your retirement accounts. Read more here on how you can reduce your taxable income legally, this will help you to reduce the cost and maximize the profits that you will get. When you contribute to your retirement plan, you will be able to reduce your taxable income for this ill reduce on the gross income, this is one of the best alternatives that you can do. When you work together as a couple to reduce the taxable and contribute to the retirement plan, this will reduce the tax they will pay by twice and this legal to minimize the cost.
There is a way of starting a health saving account. You can opt to open the health saving account, this will secure your health, opening this account will help you to reduce the taxable income. You can contribute as much as $3550 to the HSA accounts, this will help you to reduce your taxable income for every year, and it is legal.
There is a way of opening a flexible spending account. You can also open a flexible spending account that will help you to reduce your taxable income, the flexible accounts allow you to withdraw cash or income pre-tax that you can use for medical expenses. You should ensure that you spend all the money in your flexible spending account for if you fail to do so, it will expire at the best end of the next calendar to help you reduce your taxable income.
There is a guide to having dependants. There is the amount that you have to pay for each dependant, this is according to the tax credit act, this will be up to $2000 for each dependant that you have under the age of 17, when you having dependant there is a tax deduction that you are entitled to help you reduce your taxable income.
In conclusion, you can do the above guides or steps that will help you to reduce your taxable income, this will help to reduce your gross income, and you will be able to pay less.