Tax Time!

One of our members is getting too much back on his tax return, so he's looking at withholding the minimum amount. He has a complicated tax scheme, with children and a rental property in the mix. He definitely benefitted from going to an accountant for this one--somewhere in the neighborhood of 30 forms. Hey, apparently you can get  all sorts of interesting deductions like on the depreciation of your house. That said, his is probably a somewhat extreme case. Most of us are merely renting or own our homes without kids or any other properties. But it does potentially to look at ways of reducing your tax burden.

Another nifty thing you can do, is manage your contributions to IRAs to adjust your taxable income. Say, if things are close you can contribute enough to reduce your taxable income so that you fall into the next lower tax bracket. And then you can contribute to a Roth IRA if you have anything more you'd like to contribute. Depending on your employer, you may have the option of doing this through your payroll deductions as well. It would all be coming out of the same till, but it is nice when saving is convenient.

Ultimately, it can feel easier to just pay whatever and not worry about it, but if you can take the time to try and do things properly, it can benefit you in the both the short and long terms.

Profit!