Reduce Debt with Tax Savings

 

Most people believe that they pay way too much in taxes and where many individuals are living from paycheck to paycheck, it is particularly frustrating to see 15% or more of their earnings disappear before it's even in their hands. Although reducing the amount of taxes paid will not constitute a total fix, it does offer some much needed financial relief. These savings can assist in meeting your expenses, paying down debts and planning for the future.

Consider tax savings tips such as deducting the interest paid on educational loans. In past years this could only be done for a maximum of 5 years but that limitation is now gone. If possible, try and accumulate medical procedures into a single year. Some medical procedures are emergencies that must be addressed immediately; however, there are tax advantages if you accumulate a certain level of medical expenses in one calendar year.

Consider purchasing an energy efficient vehicle as deductions are available for those that drive alternative fuel vehicles. Be sure to invest in IRAs and Roth IRAs. Both of these options offer significant tax advantages and allow you to invest dollars on a pretax basis. You can deduct expenses associated with job search such as the cost of resumes and relevant long distance telephone calls. Be sure to gather your tuition statements since deductions are often available for educational tuition.

If you can afford to, consider donating stock as most charities will gladly accept stock donations which qualify for a tax deduction.

Taxes are here to stay and there is nothing you can do about it, but there is something you can do to determine how much taxes you end up paying. It may take a little research and some time to complete your tax returns, but the results will be well worth the

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