Let Us Help You Decrease Your Tax Liability
Not many people look forward to tax season. Most people don’t really want to find out how much money they owe the state and the government. It can understandably cause a lot of stress and anxiety. But here at Stevens Pierce & Associates, CPA’S, we help both individuals and businesses in Twin Falls, ID and the surrounding areas save as much money as possible by decreasing their tax liability.
Tax liability is the amount of money you are responsible for paying in taxes. There are lots of strategies for decreasing your tax liability and saving money come tax season. Below are five of the most popular strategies. But we work closely with each and every client to come up with a customized plan that meets your needs and saves you as much money as possible.
#1: Invest in Your Retirement
Investing in a retirement contribution fund will not only help you in the future, but did you know that you can deduct the amount you invested from your annual taxable income? Plus, your contributions aren’t taxed until your retirement. So if you haven’t already started a 401(k) or IRA account, you should definitely do that to help you save money in the short and long term. Not sure how much you should be investing, or which contribution funds you should choose? Our accountants can help you weigh out the options.
#2: Donate to Charity
Donating to charity isn’t always a selfless act! Not only can you help others, but you can actually save some money while doing it. That’s because you can deduct your charitable contributions from your taxable income, decreasing your tax liability. Whether you are passionate about helping the homeless, the environment, children, or animals…no matter the cause, go ahead and get generous. Be sure to keep track of how much you donate, whether it be money or items, so you can deduct them come tax season.
#3: Open Up a Health Savings Account
Prepare for any future costly health expenses, and reduce your tax liability, with a health savings account. A Health Savings Account is a fund that you contribute to if you have a high-deductible insurance plan, to help you cover medical bills until you have reached that deductible. You can detract the amount you invest in your HSA from your total taxable income, meaning you spend less on taxes.
#4: Invest in Your Child’s Education With IDeal
If you plan on sending your child or children to college, starting a college saving fund is a great way to not only ensure they will have the funds to be able to afford tuition, supplies, and other educational costs, but to take a load off of your taxable income. A popular option in Idaho is an IDeal account. This won’t save you money on your federal taxes, but it can give you a deduction for Idaho state taxes. Want to learn more about how to invest in an IDeal account? Our accountants can help!
#5: Own a Business? Work From Home
If you have your own business and use part of your home or apartment for your home office, you’re in luck! You are able to qualify for certain deductions from your rent, utilities, and more for that office space. Under the simplified method put in place starting in the 2013 tax year, you can deduct $5 for every square foot of your home office, up to 300 square feet. However, you have to meet certain qualifications in order to qualify for this deduction. If you are a business owner working from home, our accountants can help you figure out how you can capitalize on deductions.
There’s no need to stress come tax season when you have Stevens Pierce & Associates on your side! We are here to help you tax plan in advance, so you can save as much money as possible. Whether you decide to put aside those savings or put them towards a vacation to reward yourself for what a great decision you made by choosing us, is up to you. Contact us today at 208-734-8662 to schedule an appointment!
