So, you want to reduce your taxes. Well, how are you going to do that when it’s already 2023? I’m going to give you three ways that you can reduce your taxes that will not only impact you in 2023, but in years to come.
The first way that you can reduce your 2023 taxes is by actually investing in yourself. “How do you do that?” you say. Well, it’s called Retirement Planning. When we set aside money into a government-defined retirement plan – so that could be an IRA, a Roth, a 401k, they could be self-directed, non-directed, mutual funds, any of those things – but when we do that, the government rewards us by reducing our taxes. It is a direct correlation.
In the example of a 401k, often times it comes out before you pay taxes. So right at the paycheck, you see a reduction in taxes. And then at the end of the year, if it was not done before taxes were taken out, you can get a deduction on the actual taxes after the fact. So before, or after you still get the reduction in your taxes. So, if you do three percent, your company does another 3%? That’s 6% of your wages going into retirement accounts. You can actually adjust your W9 deductions that you’re claiming, and it will show you to offset that amount of taxes that’s being taken out. So, you can actually bank that money, even better for the next year.
If it’s self-directed, you can take those monies and invest them into Real estate, which is the number two way that you can reduce your taxes. We get several things that we get to take advantage of when you’re paying mortgage interest. The IRS lets you deduct that mortgage interest on your taxes when you purchase real property. Like real estate, you also get to claim depreciation. You can speed things up with Bonus depreciation.
The number three way is by not filing AZ form. When you file the EZ form, you actually miss out on a lot of opportunities. For instance, many people forget about the new car that they bought that. They paid a large amount of sales tax on these, or any big purchases that year. Many times, you pay more than that.
Other things that are often missed in the EZ form is our medical deductions. That’s right. Medical deductions every time you went to a doctor and had to pay any insurance premiums, any X-rays and blood work and all of that. So, when we actually took the long form and actually claim those medical deductions, we saved even far greater amount on our taxes.
The other one is the mileage aspect that many people just forget about that. Something simple as tracking. Looking up in your calendar. You put those appointments in your calendar every doctor visit. How many miles it was other things that can be deducted on mileage is trips to your rental properties. So now remember if you were compounding – you put money into a retirement, then you turn around and bought real estate, then you went to that property to do maintenance, just check on the property, it doesn’t matter what the reason is, but if you’re traveling to that rental property, that mileage counts. Whether you’re driving or flying, you maybe had to buy a plane ticket and all of those things add up to deductions.
If you’re ready to jumpstart your 2023, then you’re going to want to connect up with some of our other folks at the eQRP. Click on this link to connect up with our eQRP friends at Total Control Financial. If you are also looking to figure out some other ways, there’s tons of Free software, we used TurboTax for years, we tried Tax Act and a couple other ones. Your banks will even give you discounts on the TurboTax.
So, if you’re looking to save taxes in 2023: Invest in yourself, buy real estate, and take the time to not file your EZ on your 2023 taxes.
Have any other suggestions or thoughts? Feel free to reach out to us. Bye for now.
