Best class tax help providers in Houston, TX? If you don’t have a tax preparer yet, a good way to find one is to ask friends and advisors (such as an attorney you know) for referrals. Be sure that the person you choose has a Preparer Tax Identification Number (PTIN) showing that they are authorized to prepare federal income tax returns. You should also inquire about fees, which are likely to depend on the complexity of your return. Avoid using a firm that intends to take a percentage of your refund. The IRS website has tips for choosing a preparer and a link to the IRS directory of preparers, which you can search according to their credentials and location.
Why Change the Character of Your Income? One way to reduce your tax burden is to change the character of your income. If you’re wondering why you should do so, here are some of the ways it can help you to lower your tax bill. Convert your SIMPLE, SEP, or traditional IRA to a Roth IRA. If you are over the age of 591/2 and you meet the five-year rule, Roth distributions are tax free. Because they are not considered investment income, they will not increase your modified adjusted gross income (MAGI), which is used to calculate the 3.8% Medicare surtax.
Timing your income involves moving it from one year to another. You first have to determine the year in which you expect to pay the most in taxes. Review your current expenses before the end of each year and prepay some of those amounts if you want to reduce your income for the current year. You can also increase your expenses and decrease income by making expenditures such as stocking up on supplies. The end of the year is also the time to review your customer accounts if your business operates on the accrual accounting method. First, find those customers who aren’t likely to pay you. You can write off the amounts they owe as “bad debts” and deduct these amounts from your business income to save on taxes. See additional details on https://greentree.tax/.
When you offer a 401(k) or other qualified retirement plan, employer contributions and some administrative fees are tax-deductible if they meet certain criteria. And qualified employers can receive a $500 per year tax credit for the first three years of the plan. Plus, as an employee of your practice, you will be able to take advantage of tax-deferred savings with your company 401(k) as well. To make sure the plan seamlessly integrates with your current back-office systems and payroll deductions, contact your payroll services provider to see what retirement savings plans they offer.