This past year was the first year that I was fortunate enough to work from my home. Working from my home has been a wonderful change for both personal and professional reasons. The only thing that caused a slight issue was the tax filing changes that I had to endure. The office in my home was now considered a tax deduction. I had to get some help learning how to deduct the things that are allowed on my federal taxes. If you are new to working from home and have a home office, this blog can help you learn what you need to know before tax time rolls around.
Tax planning is something that everyone should be doing, not just those who are rich.
What Is Tax Planning?
Tax planning is reviewing and crunching numbers to lower the amount you owe during tax season by doing what you can to decrease the amount of taxable income you make. This may involve having to restructure all your finances and where your money is going. According to the IRS, it is legal to try to decrease the amount of money you owe to taxes each year.
How Can You Plan Your Taxes?
There are a few actions you can take to maximize the amount of money in your pocket and therefore minimize the amount of money you pay in taxes.
Those actions include:
What Can You Do Without Assistance to Save on Taxes?
If you do not want to hire someone to help you with your tax planning and you're not tax-savvy, there are still a few steps you can take.
If you don't already have a retirement or 401(k) account, you don't need to hire someone to help you open one. By setting up an account, you are relocating your income which will decrease the amount of taxable income you are making.
It is also always a good idea to keep the receipts of anything that can be written off as a deductible when tax time arrives.
Who Provides Tax Planning Services?
Tax planning services will usually be provided by a certified public accountant, or CPA. There is also the option to work with an enrolled agent, or EA. These are both professionals who have been educated, trained, and specialize in tax-related issues and topics.
How Much Does It Cost to Utilize Tax Planning Services?
The cost of hiring a CPA or EA can vary depending on the firm they work for. The cost of having your taxes filed and finding and planning on how to save on your taxes in the future can cost between $176 and $273, depending on the exact services you are needing.
Do You Have to Use Tax Planning Services?
No, you do not need to utilize tax planning services, but it's what benefits you most. No one wants to pay more taxes than they absolutely have to, so why not reach out to a trusted CPA to help you maximize the money in your pocket?Share
28 May 2021