2011 Tax Planning Tips

by Marylove Moy 23. February 2011

Do you really want to read about tax planning????

Ummm…

The answer is a big YES because it can help you and your family’s financial situation.

Goal number one in tax planning is to reduce your taxable income or adjusted gross income (AGI). Aside from the obvious fact that the easiest way to reduce your income is to earn less (duh!), the best way to reduce your AGI is to contribute to a (401k) or whatever retirement plan is offered to you by your employer. Your contribution reduces your wages and therefore lowers your tax bill.

Don’t tell me that you can’t afford to increase your contribution rate to your retirement plan. Try bringing in your lunch a few days a week or pass on a couple of lattes; those dollars add up. Better yet, try signing up for a Personal Finance Manager (PFM) such as Mariner360 and find out where your money REALLY goes. I'll bet you'll be able to spot a few places where you are spending unnecessary dollars that could be going towards your retirement.

Talk about killing two birds with one stone: reducing your tax bill and saving for your retirement!

Now that is a plan.

As always, please consult your tax advisor when when completing your tax return.



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