Let’s face it: taxes are overwhelming. They are hard to understand, and even harder to manage. We want to simplify this concept and give a couple ways to reduce your taxable income to Uncle Sam.

As your income increases your tax rate increases. The complexity arises from the various types of income as well as deductions and credits available to taxpayers that plan carefully. The tax code, however, has a number of loopholes within itself which a CPA can help taxpayers sort through. 

Can you as the average American reduce your tax bill?

Yes.

Regardless of your income, it is financially wise to take any available tax deductions and credits you qualify for. 

So, how do you reduce your taxable income? 

• Contribute as much as you can to pre-tax retirement savings plans
• Participate in pre-tax health savings accounts like HSAs
• Pay attention to potential tax credits
• Practice tax-loss harvesting with your investments

These basic ideas can help reduce your taxable income, hopefully to $0.00! If you need help in understanding any of these ideas or are interested in guidance from a Financial Planner, do not hesitate to reach out to our team at Twenty Fifty Capital.