The most effective way with which to reduce your overall tax liability is to take advantage of credits and deductions. It works by reducing how much you officially made, which in turn puts you in a different tax bracket. Because you have a lower income, you wind up paying less in tax. Working with a tax preparer in Brooklyn helps you get all of the reductions that you are entitled to without triggering an audit.
Throughout the year, your money is used for things that can be used to lower your taxes later. If you own a home, your mortgage interest and property taxes are deductible. In the event you are self-employed and have spent money towards the business, those expenses are used to reduce your income. Another way to reduce liability is child care credits. Any money you paid towards your child’s daycare can be used as a credit on your taxes.
Another way in which to reduce the overall liability is through itemized deductions, otherwise known as Schedule A. This replaces your standard personal deduction that is given by the IRS. In the event you have spent money towards medical care, mortgage interest and property taxes to an amount that far exceeds your personal deduction, you can use it to pay less in taxes.
Working with a tax preparer in Brooklyn is the best way to get all of these deductions and have them done in such a way that there is no question from the IRS. A tax preparer knows what questions to ask of you in order to find all credits and deductions you can use. It’s important to be sure that you use only the ones that you are entitled to and can show proof of in case of an audit. The preparer is well aware of the audit risk when taking advantage of the reductions, but you must be as well.
The end goal is to get your tax liability down to a point where you owe very little or can get a refund for the current year and the ones following. Make sure to discuss what your options are for future years with the preparer so you can keep proper documentation and get the benefit. Click here to read more info about having your taxes prepared.
