Taxes typically make up the largest–and most confusing–portion of people’s expenses. However, they also represent one of the best ways to reduce our spending.
In this section, we’ll make you tax savvy by explaining how the system works, offer basic planning and tax-preparing strategies, tell you what kinds of professional help are available, and help you to reduce your chances of getting audited.
The U.S. Tax System
You file your tax return every year, but do you know the difference between a W2 and a W4? This section describes the basic elements of your tax system and how it works.
Basic Tax Planning
Even though tax planning can be a potent way to reduce your spending, people often assume that their incomes are too low, investments too simple, or the potential savings too small to justify anything that resembles tax planning.
Luckily, basic tax planning techniques, which are usually the ones that have the greatest potential to reduce your tax bill, are easy to learn, straightforward to implement, and completely legal.
Read this section to learn about exemptions, deductions, withholdings, tax credits, and retirement accounts.
Preparing Your Taxes
Preparing your own taxes can be relatively quick and painless, even for fairly complicated returns. We’ll help you decide if preparing your own taxes is for you and how to go about it.
Professional Tax Help
Sometimes it’s better to let the pros handle it. Real estate, investments, and life changes can turn your tax return from EZ to impossible. We’ve made a list of professionals who can help and what you should expect from them.
Although the IRS may select you at random, you can reduce your chances of being audited by avoiding certain “red flags” on your tax return. Find out what they are and how to file your taxes in the most compliant way possible.