| Taxes of any type and form always burden you. Your | | | | comparing it with your present income tax. All |
| income, off and on, is half eaten by the taxes you pay. | | | | information in this regard is found in form 1040, line 62, |
| These taxes can be federal taxes, state taxes, local | | | | which also gives detailed information on your total tax |
| income taxes, payroll taxes, which include Social | | | | liability for the year. |
| Security and Medicare, sales tax, excise taxes and | | | | 3. Plan your investment - If you know the facts, you |
| property taxes. However, if you are intelligent enough, | | | | will be better in generating your wealth. This means, |
| you can apply tax-planning tricks that would eventually | | | | that you can choose available and effective |
| enhance your income. Given below are the effective | | | | tax-saving investment plans. You can choose NSC, |
| steps for reducing your tax burden: | | | | infrastructure bonds, flexibonds (Anshu - Pls check the |
| 1. Understand your tax situation - By understanding | | | | research, I don't think there are NSC bonds etc in |
| how much tax you will pay, or what part of your | | | | America) and the like. Thus, you will save a major |
| income is taxable, you would smoothen your tax | | | | portion of your taxes and you can invest this money |
| burden. In addition, you should keep a fair account of | | | | to earn extra profits. It is this money that you used to |
| your daily and miscellaneous spending on various items. | | | | waste away paying taxes and adding to Uncle Sam's |
| These include housing, medical care, food, | | | | kitty. What is more, if you reduce your taxes, the |
| transportation, recreation, clothing and other luxury | | | | government will give you extra benefits on retirement. |
| items. If you calculate, you would come to know that | | | | 4. Tax Saving Strategies - This is the most important |
| you spend approximately double the amount of above | | | | step that will make your income grow. You can |
| items on the taxes you pay on your income. | | | | download some real tax information from the net on |
| 2. How much did you pay as taxes - You can | | | | various tax saving strategies. In addition, you can |
| estimate how much you paid as taxes the previous | | | | consult a local tax professional. |
| year, and how much extra or less will you be paying | | | | Thus, by following these simple and effective steps, |
| this year. You can do this by getting the details of the | | | | you will certainly improve upon your income by |
| previous year's personal income tax returns and | | | | reducing your tax burden. |