Strategic tax planning is one of the best ways to save money. Ed Lloyd & Associates, the popular tax experts have listed below are some of the best ways to save thousands of dollars on tax:
You need to first know if your company offers a retirement plan. Some of the most popular ones these days include SIMPLE IRA, 401(k), 403(b) etc. Once you know about this, it is time to know if you qualify. Here, it is crucial to make sure you contribute an adequate amount to the company so as to acquire the desired match. For instance, if according to the benefits package you go for, the employer will match around 50 per cent of the contribution by an employee (6 per cent of his salary). This means contributing 6% will make your company kick in about 3 per cent. To sum up, you need to increase the contributions to ensure more savings on tax bill each year. “So it is time to contribute more towards the retirement accounts,” says Ed Lloyd CPA
Term Life Insurance
A lot of employers will offer group term life insurance to their employees. This is given as an integral part of their benefits package on salary. The amount offered is generally one to times of the salary offered to the employee. In case, you have dependents such as spouse or children; then you can sign up for extra coverage on term life insurance. Here, you may even purchase an individual term life insurance plan to guarantee assets for the family in the event of something happens to you. Naming a beneficiary is important.
In case, you take bus or metro to work on a daily basis, then your employer may offer you commuter benefits. This facilitates you to pay for expenses on public transit through your pay-checks via the use of pre-tax dollars. According to Ed Lloyd, this may seem to be a very small change but it can save you a good amount of money on expenses that have become an integral part monthly budget.
For more information on tax planning, read – Top Benefits of Hiring a Professional Accountant- Ed Lloyd and Associates PLLC