Increase your wealth with tax-advantaged income

Most people are focused on maximizing deductions when it comes to tax minimization. People look for ways to lower their taxable income, such as taking advantage of tax laws that allow them to claim a variety of expenses as costs of doing business. While this is an important part of your comprehensive tax strategy it is not the only way to lower your tax bill. Look beyond the current income to find ways to generate income that is tax-friendly.

Your Certified Tax Coach can help you think outside of the box in order to reduce your tax liability. These professionals can help you find ways to create tax-deferred income or tax-free income that will increase your wealth faster.


THE TROUBLE WITH TRADITIONAL INVESTMENT INCOME

The majority of taxpayers depend on traditional financial products to save and invest. These include money market and standard savings accounts, certificates and deposits (CDs), mutual funds and brokerage accounts. However, income from dividends, interest, and an increase in share value are subject to high taxes. These options are important to your financial plan. However, they don't have to be the only option. To reduce your tax liability, make sure you maximize tax-deferred or tax-free programs.


OPTIONS FOR A TAX-DEFERRED INCOME

It is becoming harder to live the retirement lifestyle that you desire. It is important to save money so you can enjoy retirement years after you retire from the workforce. There are many retirement savings programs that can help you achieve this goal. These programs offer the opportunity to receive tax-deferred income or tax-free income. This lowers your total tax bill to the IRS.

Certain employer-sponsored retirement plans, traditional IRAs, and certain types of annuities are tax-deferred. You contribute a portion your current income on pre-tax basis. This amount is not subject to income taxes. Instead, taxes will be assessed once you take distributions.

Two things are a result of this. This means that your money is with you for longer and you can earn interest on funds that you otherwise would lose to taxes. Second, many people retire in lower tax brackets. This means that you will pay less tax later than if you had paid today.


THE TAX-FREE OPTION

There are many options available if you want to earn income that is totally tax-free. You can eliminate some taxes by using certain types of life insurance, annuities and retirement savings plans such as the Roth IRA. These types of programs have after-tax dollars, which is a difference to tax-deferred plans. This means that you will pay income tax on the funds you have set aside in these accounts. Once you have paid the initial income tax, there is no additional tax. All gains in value due to dividends, interest, or similar are exempt from tax.

It is not enough to find deductible expenses, but minimizing taxes. You can reduce your tax bill by using a variety of strategies. You can reduce your taxes by shifting income or creating income that is subject to favorable tax treatment.

Contact us to get our Tax preparation services.



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