Millionaire HabitsMillionaire Habits
    Facebook Twitter Instagram YouTube
    Twitter Facebook Instagram YouTube
    Millionaire HabitsMillionaire Habits
    • Get Started
      • The FIRE Movement
      • Financial Automation
      • Your Emergency Fund
      • Investing for Beginners
        • ETFs
        • REITs
        • Roth IRAs
        • Mutual Funds
        • Traditional 401(k)s
      • Wealth Building Timeline
      • Why Financial Independence?
    • Topics
      1. Careers
      2. Lifestyle
      3. Debt Relief
      4. Retire Early
      5. Personal Finance
      6. View All

      I’ve Interviewed Hundreds: Here Are My 9 Top Interviewing Tips

      November 8, 2023

      Gain 2 Extra Hours Daily with These 4 Simple Micro Habits

      October 29, 2023

      Say Goodbye to Office Commutes Forever with These 10 Home Office Hacks

      October 28, 2023

      Don’t Make This Massive Mistake: Why You Should Reject That Job Offer ASAP

      October 28, 2023

      I Interviewed 150+ Millionaires – Here’s What You Can Learn From Them

      December 2, 2023

      From Nomad to Millionaire: 15 Travel Jobs You Can Do From Anywhere In The World

      November 28, 2023

      The Secret Millionaires’ Rituals: 12 Steps to Skyrocket Your Success

      October 26, 2023

      Morning Mistakes: 13 Daily Habits You Must Quit Now for an Amazing Day

      October 25, 2023

      Student Loans Repayments Start This Month – Here’s What To Do

      October 2, 2023

      6 Strategies to Expedite Student Loan Repayment

      August 13, 2023

      Early Retirement Could Ruin Your Life – Here’s Why You Shouldn’t Retire Early

      October 30, 2023

      CoastFIRE: Achieve Financial Freedom By Coasting

      August 29, 2023

      BaristaFIRE: Achieve Financial Independence by Working Part-Time

      August 28, 2023

      FatFIRE: Achieve Financial Independence In Style

      August 27, 2023

      15 Things You’re Almost Definitely Wasting Your Money On

      December 2, 2023

      15 Tricks Clever Marketers Use To Make You Spend More Money (They Work!)

      December 1, 2023

      12 Things You Should Never Buy With Cash (Use Credit Instead)

      November 12, 2023

      The Truth About Millionaires: Most Believe These 9 Lies About The Wealthy

      November 9, 2023

      Open Minds and Hearts: The 17 Top LGBTQ-Friendly U.S. Cities

      December 2, 2023

      I Interviewed 150+ Millionaires – Here’s What You Can Learn From Them

      December 2, 2023

      15 Things You’re Almost Definitely Wasting Your Money On

      December 2, 2023

      $100,000 in NYC

      December 2, 2023
    • Write For Us
    • About
    • Contact
    Subscribe
    Millionaire HabitsMillionaire Habits
    Home»Millionaire Habits»Q & A Wednesday»Pay Less Tax
    Q & A Wednesday

    Pay Less Tax

    Steve AdcockBy Steve AdcockNovember 15, 2023Updated:November 15, 20233 Mins Read
    Share Facebook Twitter Pinterest LinkedIn Tumblr Reddit Telegram Email
    Pay Less Tax Legally
    Share
    Facebook Twitter LinkedIn Pinterest Email

    Welcome to Q & A Wednesday on Millionaire Habits, where I answer one of your weekly questions for everyone’s benefit. Have a question?

    Reply to this email, and I’ll consider it for a future email.

    💡 Question: “Tax season is coming up, and I’m afraid I will be stuck with a big tax bill. Is there any way I can reduce my tax liability legally?”

    Taxes suck.

    They suck even more when you think about where your money is being spent (usually on pet projects, wasted on nonsense or plain lost).

    But if there’s anything constant in this world, it’s taxes.

    And death, but let’s not get into that.

    The answer is yes, there are pleeeeeeenty of ways to reduce your tax liability legally. And believe it or not, they aren’t difficult!

    Ready?

    How to Legally Reduce Your Tax Bill

    While most of this email applies to those in the U.S., some overlap may exist for those overseas. Be sure to do a little due diligence if you’re not in the U.S. to see if these tricks work for you.

    Here’s the scoop: The U.S. government provides many ways to reduce your tax liability. You just gotta know what they are.

    For instance, did you know that you can take a home office deduction if you work from home? This includes some of your home utilities like rent, insurance, and Internet access.

    Here are several more ways to reduce your tax liability.

    Charity: Making charitable contributions supports good causes and provides tax benefits. Donations to qualified charities are deductible. For those who itemize deductions, this can greatly reduce taxable income.

    401(k): Contributing to retirement accounts is a highly effective way to reduce taxable income. Contributions to traditional IRAs, 401(k)s, and other similar plans are made with pre-tax dollars, lowering your taxable income for the year. These contributions grow tax-deferred until withdrawal in retirement.

    HSAs: HSAs and FSAs offer tax advantages for medical expenses. Contributions are tax-deductible, and withdrawals for qualified medical expenses are tax-free. HSAs have the added benefit of rolling over year to year, allowing for long-term savings.

    Tax credits: Tax credits directly reduce the tax owed, dollar-for-dollar. Some notable tax credits include the Earned Income Tax Credit (EITC), Child and Dependent Care Credit, and education credits. These can be more beneficial than deductions as they reduce tax liability, not just taxable income.

    Real Estate: Investing in real estate offers numerous tax benefits. Depreciation, mortgage interest, and property tax deductions can significantly reduce taxable income. Additionally, real estate investors can use strategies like 1031 exchanges to defer capital gains taxes.

    Education: Investing in education can also offer tax benefits. The Lifetime Learning Credit and the American Opportunity Tax Credit are available for qualifying education expenses. Additionally, student loan interest can be deductible, reducing taxable income.

    If you have a “tax guy” or a personal finance advisor, ask if you qualify for tax deductions. If not, here’s how to find a good one.

    See you in your inbox on Saturday,

    – Steve

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Previous Article15 Stupid Ways People Pretend To Be Rich And Are Getting Laughed At
    Next Article The 10 Most Inclusive Companies for LGBTQ+ Employees
    Steve Adcock
    • Website
    • Facebook
    • Twitter
    • Instagram

    Steve Adcock quit his job after achieving financial independence at 35 and writes about the habits millionaires use to build wealth and get into the best shape of their lives. As a regular contributor to The Ladders, CBS MarketWatch, and CNBC, Steve maintains a rare and exclusive voice as a career expert, consistently offering actionable counseling to thousands of readers who want to level up their lives, careers, and freedom. Steve lives in a 100% off-grid solar home in the middle of the Arizona desert and writes on his own website at MillionaireHabits.us.

    Related Posts

    Q & A Wednesday

    How To Murder $23,000 In Debt

    November 29, 2023
    Q & A Wednesday

    How To “Invest In Yourself”

    November 22, 2023
    Q & A Wednesday

    How Much House Can I Afford?

    November 7, 2023
    Add A Comment

    Comments are closed.

    The Latest
    Lifestyle

    I Interviewed 150+ Millionaires – Here’s What You Can Learn From Them

    Steve AdcockDecember 2, 2023

    Meeting millionaires can be an eye-opening experience. Each of them has a unique story, filled…

    15 Things You’re Almost Definitely Wasting Your Money On

    December 2, 2023

    $100,000 in NYC

    December 2, 2023

    15 Tricks Clever Marketers Use To Make You Spend More Money (They Work!)

    December 1, 2023

    • Facebook
    • Twitter
    • Instagram
    • YouTube
    FI/Accelerator
    Facebook Twitter Instagram Pinterest
    • Privacy Policy
    • Disclaimer
    • Sponsor
    • Contact
    • About
    © 2023 SAA Digital, LLC.

    Type above and press Enter to search. Press Esc to cancel.