How to Legally Pay Less in Taxes – EP 198

We know we can’t avoid death or taxes, but it sure is worth considering how to prolong life… and pay less in taxes (legally of course). We’re taking a look at some of the lesser-known ways we can see a lower tax bill at the end of the year based on the nuanced situations in which we may find ourselves!

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The path less traveled. Sure it may not be well worn and might even be overgrown but it’s quieter and usually more interesting. The path less traveled; if it means doing the right thing – take that path.

Disclaimer: We are not tax professionals, we do not give tax advice, this episode is for educational purposes only and if you think something applies to you, double-check it with your tax software or CPA.

Headlines

This article from US News outlines some of the lesser known tax codes we could be taking advantage of to see a lower tax bill at the end of the year!

What Jen and Jill have to say:

Contribute to retirement account
Open a health savings account (triple tax advantage)
- frugalfriendspodcast.com/starship
Claim home office deduction
Deduct half of your self-employed taxes
See if you qualify for an earned income tax credit
Make charitable contributions
Use side hustle to claim business deductions
Write off business travel expenses (while on vaca) – only if have a side business
Get credit for higher education
- The American opportunity tax credit can be claimed for the first four years of college and provides a maximum credit of $2,500 per student per year.
Itemize state sales (can deduct the sales tax paid on items) – for those who itemize their taxes rather than taking standard deduction

More Headlines:

This article from Turbo Tax gives us 5 ways to see a higher tax refund.

More from Jen + Jill:

1. Rethink your filing status
2. Embrace tax deductions
3. Maximize your IRA + HSA contributions
4. Timing can boost your tax refund
- Look for payments or contributions you can make before the end of the year that will reduce your taxable income.
5. Become tax credit savvy

BILL OF THE WEEK – Thank you Natashia for sharing your bill about Christmas gifts and how you decided to repurpose belongings into gifts for others!

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Lightning Round

How we save on taxes:

Jen- We use an accountant!
Jill- I moved to Florida where I DON’T HAVE TO PAY STATE AND LOCAL INCOME TAX ANYMORE!!!!!!!!!

Wrap-Up:

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Thanks for listening! See you next week!