The end of their year can mean lean financial times for many American taxpayers. With holiday spending and end of the year deals, it’s tough to make that paycheck stretch. As featured Tax Defense Network’s YouTube profile, TDN’s Jason Agate lent his expertise on ways to free up some extra spending money around the holiday season to CBS 12 News and their West Palm Beach, Florida viewers.
Agate, who is an enrolled agent at Tax Defense Network, informs taxpayers that they can keep more of their income by paying less in taxes. To do this, taxpayers can adjust their W-4, the Employee’s Withholding Allowance Certificate, which tells their employer how much federal income tax to withhold from their paycheck.
“What you want to do is adjust your withholdings not so much that you have a balance due when you file your tax returns, but so much that you have a minimum refund,” advises Agate.
W-4s can be adjusted at any time during the year, but taxpayers must be careful not to free up too much money that they wind up owing the IRS when it comes time to file a return. Agate advises taxpayers to use the IRS’ withholding calculator to figure how much they should withhold.
Agate went on to list ways to pay less in taxes all year round. While these strategies may not necessarily mean more money in your pocket, they will lessen your tax responsibility come time to file your taxes.
- Contribute to a pre-taxed retirement plan. Contributions to a pre-tax retirement plan like an IRA or 401(k) can be deducted based upon your income and enrollment in a work-sponsored retirement plan.
- Donate to a tax deductible charity. Always double check that the charity you are donating to is legitimate by using the IRS’ Exempt Organization check, and be sure to keep proof of your donation like a receipt or a bank statement.
- Remember that local and personal property taxes are deductible.
- Take advantage of tax credits for spending money on child care, higher education, energy efficient home improvements and electric or hybrid vehicles.
More tax tips and advice can be found on Tax Defense Network’s twitter account.
Tax Defense Network is a national tax debt resolution company in Jacksonville Florida. It is A+ rated by the Better Business Bureau, and its team of licensed tax professionals, enrolled agents and CPAs has resolved over $120 million in tax debt.