Whether it’s your personal or business finances, a professional well-versed in tax planning in Lawrence, KS, can help you maximize credits and take advantage of other opportunities to reduce your tax liability. Here are a few ideas to get started.
An effective filing system can reduce stress and save time. Tracking receipts, transactions and other financial documents is essential to prepare for filing taxes.
Visit us today for assistance with analyzing your financial situation and reviewing past tax returns.
Know Your Income
A progressive tax system means people with higher income will pay more taxes, but all income isn’t treated equally. Portions of income are taxed at different rates. Your first tax bracket might be 10% while your last portion may be at a much higher rate. Creating a strategy to reduce your income is easier with the assistance of professional tax planning in Lawrence, KS.
Understand Tax Credits and Deductions
Credits reduce your income in matching amounts and aren’t affected by tax brackets. A $500 credit will lower your income by $500. The value of deductions is determined by your tax liability and marginal tax rate so credits provide better cost savings. Common tax credits include child care, retirement savings and earned income.
Take steps throughout the year to prepare for tax season. Investments, purchases and savings impact your taxable income, credits and deductions. The experienced team at Peggy’s Tax & Accounting Service is dedicated to effective tax planning for individuals and businesses. Visit us today at website.