Question

action plan for tax planning:

What tax strategies will we utilize to pay every penny owe to the government, and not a penny more (for a given level of income of $50000/ year)? What strategies will take to reduce taxable income.

Answer 1

Annual Income - $50,000. Tax year considered: 2019.

The best way to maximize your tax savings is to File Returns Jointly with your Spouse. This gives the highest standard deduction of $ 24,400.

If your standard deduction is less than the sum of your itemized deductions, you should itemize and save tax.

Some of the easily available Tax deductions and Credits are as follows:-

> American Opportunity Tax Credit - This lets you claim all of the first $2,000 you spent on tuition, books, equipment and school fees — but not living expenses or transportation.

> Deduct up to $2,500 from your taxable income if you paid interest on your student loans.

> Child and dependent care tax credit.

> Child Tax Credit.

> Adoption Credit.

> Charitable donations deduction.

> Medical expenses deduction.

> Deduction for state and local taxes, including Property taxes.

> Mortgage interest deduction.

> Contributions to Health Saving Account or a traditional IRA.

There are many such Tax Deductions and Tax Credits available when you file itemized return.