4 Basic Actions to Minimize Your Taxes in 2021!

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4 Basic Actions to Minimize Your Taxes in 2021!

Does Tax Season get you down?

 

Here are 4 simple Actions that any small business owner can take to decrease your tax bill this year:

 

ACTION # 1: Understand How Serious Your Tax Problem Is

Are you knowledgeable about just how much in taxes you are paying?

Here’s how much the average family spends on different customer classifications– as a percentage of income.

You must recognize that it’s not how much you spend on taxes that is very important, it’s just how much you invest in taxes as compared to all other significant classifications of costs.

Customer Spending:

How Do You Spend Your Hard-Earned Dollars?

Taxes ——————————- 32.0%

Real estate ———————– 16.7%

Healthcare ———————– 11.5%

Food ———————————– 8.2%

Transport ————————— 7.9%

Entertainment ——————– 5.7%

Clothing —————————– 4.1%

Cost savings ———————- 1.4%

Other Miscellaneous ——– 12.5%

OVERALL ———————— 100.0%

So, if you believe you are being “nailed” by the government, you are right. You spend more on taxes than any other category of consumer spending. In truth, you spend more on taxes than on housing, clothing, and food combined.

And it’s not simply federal income taxes we’re discussing here. There’s likewise state and local income tax, payroll tax (Social Security and Medicare), sales tax, excise tax and real estate tax.

Perhaps you currently understood “intuitively” that your tax bill is insanely high. If not, the photo I’ve simply painted ought to thoroughly convince you that you pay too much tax, period.

Summary:

Here are 4 simple Actions that any small business owner can take to decrease your tax bill this year:

ACTION # 1: Understand How Serious Your Tax Problem Is

ACTION # 2: Get the Right Attitude About Your Taxes

ACTION # 3: Realize That Reducing Taxes Is the Easiest Path …..

ACTION # 2: Get the Right Attitude About Your Taxes

What do I mean by this? Well, you simply must have a certain “mental mindset” toward this whole concept of paying taxes. I’ll get right to the point– you should have a mindset about taxes that states, “Enough is enough. I’m paying way excessive tax and I do not like it. And it’s about time I found a solution for it– TODAY!”.

After checking out those numbers above, how do you feel? Does not that just make you furious? If so, fantastic, then you are on your method to fixing this problem. The old cliche holds true: “You can’t fix an issue till you confess you have one.”).

I pay 32% in taxes. You will continue to pay too much tax because you do not care about it. To minimize your taxes, you need to be committed to the idea of paying less taxes.

Prior to today is over, go get in 2020’s individual tax return (Form 1040) and take a look at how much tax you paid. When you have Form 1040 in front of you, do you realize where the most important number is on this type?

No, it’s not Line 71– the refund quantity.

No, it’s not Line 74– the balance due amount.

The most essential number on Form 1040 is Line 62.

It states: This is your TOTAL TAX. That is just how much federal income tax you paid for all last year. It doesn’t matter whether you got a refund or whether you had a balance due when it comes to lowering your taxes.

What matters most is: What was your total tax liability for the year. That’s the “magic number” that must just make your blood boil and your heartbeat so quick that you can barely stand it.

Now that I’ve got you all “riled up” about paying so much tax, let’s move on to ACTION # 3.

ACTION # 3: Realize That Reducing Taxes Is the Easiest Path Possible to Creating Wealth

Consider this basic fact: Reducing your taxes by simply $4,000 per year is the simplest way possible to ending up being a millionaire.

Let me elaborate.

Let’s state you implement some brand-new tax-saving techniques that minimize your taxes by $4,000 each year. Now, if you take that $4,000 annually in tax savings and invest it over the next 30 years, presuming you earn 11.5% on your investment, you end up with $1,048,745.98 at the end of the 30 years.

And here’s the very best part about this situation: Where did you get the $4,000/ year to invest? Well, you got it from money that would have gone to Uncle Sam. It’s cash that you utilized to invest in taxes, part of the 32% of your earnings that goes to taxes each year.

In result, it’s totally free money. It’s cash that was always there– you simply didn’t realize it.

Is this a good deal or what? By merely minimizing your taxes, the federal government will finance your million-dollar retirement.

And let’s state your tax circumstance is such that you save $2,000/ year instead of $4,000/ year. Same presumptions: you invest the $2,000 each year at 11.5% for 30 years.

So, all you have to do is come up with the tax-saving strategies that will put $2,000 or $4,000 in your pocket each and every year. Which brings us to ACTION # 4.

ACTION # 4: Get Hold of the Tax-Saving Strategies That Will Make You a Millionaire

You understand, it doesn’t take much info to conserve a package in taxes. It is true: simply a little bit of tax knowledge goes a very long way.

Helpful tax information is easily available. On the Internet, at your local library, and through your local tax expert.

The concern is: Are you happy to invest a long time this year finding out about effective tax techniques that can conserve you countless dollars?

Here’s a basic goal to set for yourself: Over the next 10 weeks, set aside simply an hour a week to read up on tax-reduction techniques. That’s all, simply 10 hours.

Opportunities are you’ll discover 2 or 3 methods that reduce your tax costs by $1,000 this year. You spend 10 hours and, in impact, pay yourself an extra $1,000 for your time. Not a bad per hour rate, eh? Lot of times, that’s all it takes to pay less tax.

I pay 32% in taxes. You will continue to pay too much tax because you really don’t care about it. That is how much federal income tax you paid for all last year. It’s money that you utilized to invest on taxes, part of the 32% of your earnings that goes to taxes each year. And let’s say your tax scenario is such that you conserve $2,000/ year instead of $4,000/ year.

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