The main aim behind Kissimmee tax preparation in Orlando, FL and tax planning is to implement financial strategies that reduce the overall taxes that are incurred. There are some methods by which the taxes can be minimized. Read the details below and if there is still any confusion, then please refer to your Kissimmee tax accountant in Orlando, FL.
Tax Accountant Tip 1 – Reduce income
An important factor in determining your total payable taxes is the Adjusted Gross Income or AGI. There are many variables which are calculated on the basis of AGI like your tax credits and rate. In other aspects as well such as mortgages, banks and financial programs, AGI plays an important role.
Since AGI is used to calculate your applicable tax rate, you can start your Kissimmee tax preparation in Orlando, FL with this. An AGI is your total income, but does not include any adjustments that are made to it. Obviously, the more your income will be, the higher your AGI value is going to be. Consequently, you will have to pay large amounts of taxes. But if your AGI decreases, the incurred taxes go down.
Reducing income might not be your foremost choice, but it is the most effective strategy to reduce your taxes. Contribute you income to a 401(k) account or a similar program. This will reduce the amount you earn, and thus your taxes. And the saved money will come in handy at a later stage.
Tax Accountant Tip 2 – Increase tax deductions
The incurred taxes also depend on your taxable income, which is the amount left when expenses are deducted from your AGI. You can either take standard deductions or itemized deductions. However, if you take itemize deductions, you can reduce your taxes.
There are many costs included in itemized deductions such as medical bills, property taxes, mortgage interests, charity gifts and investments. You should track all these expenses and then compare them with your standard deductions at the end of the fiscal year. Whichever value is higher of the two; you should take that for tax purposes.
Tax Accountant Tip 3 – Utilize tax credits to your advantage
Tax credits are available for college costs, adopted children and retirement funds. While adopting a child is not for everyone, you can definitely attend enroll in a college program, and contribute to a retirement plan. Educational tax credits are of two types: the Hope Credit and the Lifetime Learning Credit. The former is applicable to students who are in their initial college years and the later can be availed by anyone. Your tax accountant can guide you more about the other types of tax credits.
If you wish more information from a tax accountant in Orlando,FL please contact us at 407-344-1012. Freedomtax Accounting can help in all your tax needs. We specialize in business accounting, tax services, tax preparation, tax problems, IRS audit defense, tax debt relief, back taxes, incorporations, and non-profit 501(C3) tax exempt status applications. You can come to our Kissimmee office or you can call us since our services can be provided nationwide. Our main service area is Central Florida to locations including Orlando, Poinciana, St. Cloud, and Hunters Creek, FL.