| Does Tax Season get you down?Here are 4
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| | year. When it comes to
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| simple steps that any small business
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| | reducing your taxes, it doesn't matter
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| owner can
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| | whether you got a
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| take to lower your tax bill this
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| | refund or whether you had a balance
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| year.STEP #1: Understand How Serious Your
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| | due.What matters most is: What was your
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| Tax Problem IsAre you aware of just how
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| | total tax liability
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| much in taxes you are paying?Here's how
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| | for the
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| much the average family spends on various
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| | year. That's the "magic number" that
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| consumer categories -- as a percentage
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| | should just make your
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| of income.You must realize that it's not
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| | blood boil and your heart beat so fast
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| how much you spend on taxes
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| | that you can hardly
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| that is important, it's how much you
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| | stand it.Now that I've got you all
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| spend on taxes as
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| | "riled up" about paying so much
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| compared to all other major categories
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| | tax, let's move on to Step #3.STEP #3:
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| of spending.Consumer Spending:
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| | Realize That Reducing Taxes Is The
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| How Do You Spend Your Hard-Earned
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| | Easiest Path
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| Dollars?Taxes ----------------------
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| | Possible To Creating WealthConsider this
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| 32.0%
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| | simple fact: Reducing your taxes by just
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| Housing -------------------- 16.7%
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| | $4,000 per year is the easiest way
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| Medical Care --------------- 11.5%
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| | possible to becoming a
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| Food ----------------------- 8.2%
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| | millionaire.Let me elaborate.Let's say
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| Transportation ------------- 7.9%
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| | you implement some new tax-saving
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| Recreation ----------------- 5.7%
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| | strategies that
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| Clothing ------------------- 4.1%
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| | reduce your taxes by $4,000 each year.
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| Savings -------------------- 1.4%
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| | Now, if you take
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| Other Miscellaneous -------- 12.5%
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| | that $4,000 per year in tax savings and
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| TOTAL --------------------- 100.0%So, if
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| | invest it over the
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| you think you are being "nailed" by the
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| | next 30 years, assuming you earn 11.5%
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| government,
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| | on your investment,
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| you are absolutely right. You spend
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| | you end up with $1,048,745.98 at the end
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| more on taxes than any
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| | of the 30 years.And here's the best part
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| other category of consumer spending.In
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| | about this scenario: Where did you
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| fact, you spend more on taxes than on
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| | get the $4,000/year to invest? Well,
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| food, clothing, and
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| | you got it from money
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| housing combined.And it's not just
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| | that would have gone to Uncle Sam. It's
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| federal income taxes we're talking about
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| | money that you
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| here. There's also state and local
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| | used to spend on taxes, part of the 32%
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| income tax, payroll tax
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| | of your income
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| (Social Security and Medicare), sales
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| | that goes
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| tax, excise tax and
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| | to taxes each year.In effect, it's free
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| property tax.Maybe you already knew
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| | money. It's money that was always
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| "intuitively" that your tax bill is
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| | there -- you just didn't realize it.Is
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| outrageously high. If not, the picture
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| | this a good deal or what? By simply
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| I've just painted
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| | reducing your taxes,
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| should thoroughly convince you that you
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| | the government will finance your
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| pay too much tax,
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| | million-dollar retirement.And let's say
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| period.STEP #2: Get The Right Attitude
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| | your tax situation is such that you save
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| About Your TaxesWhat do I mean by this?
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| | $2,000/year instead of $4,000/year.
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| Well, you simply must have a
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| | Same assumptions: you
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| certain "mental attitude" toward this
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| | invest the $2,000 each year at 11.5% for
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| whole idea of paying
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| | 30 years. End
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| taxes. I'll get right to the point --
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| | result: $524,372.99. Not too shabby,
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| you must have an
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| | eh?So all you have to do is come up with
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| attitude about taxes that says, "Enough
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| | the tax-saving
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| is enough. I'm
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| | strategies that will put $2,000 or
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| paying way too much tax and I don't like
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| | $4,000 in your pocket
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| it. And it's about
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| | each and every year. Which brings us to
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| time I did something about it --
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| | Step #4.STEP #4: Get Hold Of The
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| TODAY!"After reading those numbers above,
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| | Tax-Saving Strategies That Will
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| how do you feel? Doesn't
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| | Make You A MillionaireYou know, it
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| that just make you furious? If so,
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| | doesn't really take much information to
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| great, then you are on
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| | save a
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| your way to solving this problem. The
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| | bundle in taxes. It is true: just a
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| old cliche is true:
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| | little bit of tax
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| "You can't solve a problem until you
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| | knowledge goes a very long way.Useful
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| admit you have one.")If you saw those
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| | tax information is freely available. On
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| numbers above and said, "Big deal. So I
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| | the Internet,
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| pay 32% in taxes. So what? So does
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| | at your local library, and through your
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| everybody else in this
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| | local tax
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| country" -- well, I'm sorry, but you
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| | professional.The question is: Are you
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| might as well just stop
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| | willing to spend some time this
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| reading this article right now. You
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| | year learning about effective tax
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| will continue to pay
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| | strategies that can save
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| too much tax because you really don't
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| | you literally thousands of
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| care about it.To reduce your taxes, you
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| | dollars?Here's a simple goal to set for
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| must be committed to the idea
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| | yourself: Over the next 10
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| of paying less taxes.Before today is
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| | weeks, set aside just an hour a week to
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| over, go get last year's personal income
| |
| | read up on tax-
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| tax
| |
| | reduction strategies. That's all, just
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| return (Form 1040) and look at how much
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| | 10 hours.Chances are you'll find 2 or 3
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| tax you paid.When you have Form 1040 in
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| | strategies that reduce your
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| front of you, do you realize
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| | tax bill by $1,000 this year.So you
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| where the most important number is on
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| | spend 10 hours and, in effect, pay
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| this form?No, it's not Line 71 -- the
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| | yourself an extra
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| refund amount.No, it's not Line 74 -- the
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| | $1,000 for your time. Not a bad hourly
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| balance due amount.The most important
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| | rate, eh?Many times, that's all it takes
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| number on Form 1040 is Line 62.It says:
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| | to pay less tax.Wayne M. Davies is author
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| This is your TOTAL TAX. That is how much
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| | of 3 tax-slashing eBooks for small
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| federal
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| | business owners and the self-employed.
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| income tax you paid for all of last
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| |
|
