[vc_row][vc_column width=”2/3″ el_class=”section section1″][vc_column_text]It is a safe bet to say that not many people have the desire to give more of their hard-earned money to income taxes than they need to.
The good news is that there are many ways to lessen your tax liability, such as with credits, deductions, and tax breaks.
Though many rules can assist with lessening the impact of taxes, there are only a few that the average person will be able to receive for savings. We will be going over these provisions below:
First will be that taxes have been adjusted down on long term capital gains and dividends
Tax reform brought the tax rates on earnings to lower numbers and still kept the 0% to 20%rates for long term capital gains and dividends based on what tax bracket they fall into.
This tax reform will save people over $655 billion within the five years (ending in 2022) since its implementation.
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The Government has projected over five years that it will lose almost $650 billion due to how 401(k) and other retirement plans are taxed.
However, though it may take decades and decades, until retirement, the taxes on these plan contributions will eventually be due when the time comes for withdrawals.
Another tax saving is paying $0 in taxes on contributions toward employer-sponsored pension plans until the benefits are paid once the worker becomes a retiree.
In the five years since its implementation, it is projected that the Government will lose out on tax revenue close to $519 billion. But since pension offers are becoming more of a thing of the past, these numbers will likely decline in the future.
The most tax savings an average taxpayer can get is paying $0 in taxes on their workplace offered health insurance plan.
Those who get medical insurance from their jobs are not liable to taxes on the amount of money their employers pay for them towards their insurance premiums.
A majority of people do not really understand how much their employers are paying for their employees’ benefits, as many believe that the amount the employee pays is the total amount for their coverage.
However, by not considering the value of medical insurance as income, the Government will not be getting $870 billion in taxes from 2017 to 2022. This number may actually continue to go up as the cost of healthcare does the same.
And lastly, child tax credits for families with children ranging from 0 to 16 will be $2,000 for each child. $1,400 of the $2,000 can be returned to the taxpayers.
A projected $595 billion is what taxpayers will save over the five years due to this credit.
Of course, everyone will not qualify for these tax breaks. The ones that do qualify may be getting some significant savings.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_single_image image=”36094″ img_size=”292×285″ style=”vc_box_shadow”][/vc_column][/vc_row]
