These five steps can help you save money, stay organized, and prepare for tax season with less stress.
1.Deduct
Deducting means subtracting certain expenses from your income, so you pay less tax.
Common deductions include:
- Office supplies
- Internet and phone bills
- Travel for work
- Business meals
- Software or tools used for work
To use deductions, keep all your receipts and record your spending clearly. Even small expenses can help lower your tax bill.
Need help tracking deductions? Check out our Full-Service Bookkeeping support.
2.Defer
Deferring means delaying income or tax payments to a later time.
For example, if you get paid in January instead of December, that income counts for next year’s taxes.
This can help you stay in a lower tax bracket this year. Defer when it makes sense, especially if your income changes from year to year.
Talk to a tax professional or bookkeeper to find out when this is best. Our Tax Preparation & Planning services can help you.
3.Divide
To pay less in taxes, divide your money or property in smart ways.
If you and your spouse or partner run a business together, sharing income may lower the amount of taxes you both have to pay. Some people also divide their money by setting up family trusts or paying family members who work for them. But be careful; you have to follow the rules. Talk to a tax expert before you do this.
4.Hide (Legally)
It sounds hard, but all you have to do is change the name of your income to pay less in taxes.
For example, some people might say that their income is capital gains, which are taxed at a lower rate than regular income. This will only work in some cases, and the law says it has to be done. It’s not about hiding money; it’s about using the tax laws to your advantage. If you’re not sure, please ask about our Mentorship and Assistance program.
5.Dodge (in a legal way)
This means using smart strategies to stay away from extra taxes. You’re not breaking the rules; you’re following them correctly.
Examples include:
- Using savings plans that don’t charge you taxes
- Taking all of your tax breaks
- Getting a good bookkeeper or accountant
- Instead of waiting, make plans ahead of time.
Visit our homepage to find out about services that can help you stay on top of your taxes and avoid stress.
Final Thoughts
The 5 D’s of tax planning—Deduct, Defer, Divide, Disguise, and Dodge—can help you save money and feel more in control. You don’t have to be scared of tax time.
You can make tax season easier and smarter with some planning and the help of reliable bookkeeping services.
