Tax office best firms in Houston, TX? Which receipts you’ll need to provide depends on whether you itemize your deductions or claim the standard deduction. You’ll want to choose whichever produces the greater write-off, but the only way to know for sure is to add up your itemized deductions and compare that with your standard deduction. For the 2019 tax year, the standard deduction for single taxpayers is $12,200 and for married couples filing jointly it is $24,400. For 2020, these amounts rise to $12,400 for single taxpayers and $24,800 for married couples filing jointly.
The more money you make, the more complicated your taxes are going to be. So, if you have a higher income than most people, it’s important to work with a skilled accountant to figure out how to reduce the amount of income taxes you pay. In addition to taking your standard deduction and other deductions, there are many things you can do to lower the amount you pay. Let’s start with an overview of tax rules for high income earners. For the sake of this post, we’ll consider anybody in the top three tax brackets as a high income earner. That means that if you earn more than $163,301 in gross income as a single earner and $326,601 if you’re married filing jointly, you are a high income earner.
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. Discover more information at https://greentree.tax/best-tax-preparation-services-in-houston/.
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.