It’s safe to say nobody out there, including small businesses in the Phoenix, Arizona area, is looking for a way to give the IRS more money. We’re all in the same boat when it comes to trying to lower taxes we pay each year. Here are 3 ideas on what you can this year to lower the amount you pay next year:
Contribute to an IRA
Do you or your employer not cover you with a retirement plan? Open an IRA and begin making contributions on a regular basis. The contributions can be claimed as a deduction on your tax return.
Use some time researching the rules for deductible IRA contributions and you may find that you can claim IRA contributions as an adjustment to your income. This not only lowers your taxes, but can also increase other tax credits you might qualify for. Your accountant and some tax software can help you figure out how much you can save using an IRA.
Contribute to a Self-Employed Retirement Plan
This is a great option for those who use self-employment. Any contributions you make to a retirement plan you have set up are tax deductible. Again, you can claim the deduction as an adjustment to income when filing taxes. A Self-Employed 401(k) plan allows someone who is self-employed to make contributions both as an employer and as an employee. Doing this essentially shelters up to and above one-third of your taxable self-employment income.
Contribute to a Health Savings Account
Whenever youenroll in a high-deductible health insurance plan, it’s important that you are contributing to a health savings account, or HSA. An HSA allows you to make tax-deductible contributions that are tax free when used for qualified medical expenses.
The maximum contribution to an HSA is $3300 for an individual, $6500 for family coverage, and an additional $1000 for those who are 55 or older.
Related: 3 Tax Deductible Charity Donations
Want more ideas on how to lower taxes for yourself or your small business? Contact the experts at Hacker Accounting at 602-375-5251. With over 15 years of experience, we are happy to share our expertise with you.