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10 Easiest Ways To Reduce Your Tax Bill

10 Easiest Ways To Reduce Your Tax Bill

When it comes to the savings on your tax bill; the first thing that you need to do is to learn about the tax laws to take every tax deduction to which you’re entitled. Believe me, this advice will help you save thousands of dollars.

If you want to get the detailed information, you can visit the IRS website that will help you further understand the following tax credits and deductions. If you spend some time each year on keeping you aware of the tax law, you’ll definitely save a lot. Here, in this article, I’ve compiled a list of 10 easy ways to cut your tax bill, so you can serve your finances well.

1. Retirement Account Contributions

It’s the first tax reduction tool that mainly serves two purposes. Apart from the Roth personal retirement account, almost all contributions will enable you to deduct the amount paid from your taxable income. It will eventually decrease your total tax income and these funds grow tax-free until retirement. This plan will alone secure your retirement if you start early.

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2. Health Saving Account Contributions

If you have a high deductible medical plan, then the best way is to contribute to a health saving account. In this way, your unused medical contributions will overturn for an indefinite period and grow tax-free like other assets in your retirement account.

3. Combining A Vacation With A Business Trip

Another way to cut your tax bills is by merging a holiday trip with a business trip. This way, you can decrease the cost spent on vacation by subtracting the amount of reimbursed business expenses (including the airfare and the hotel payment) from the total bill.

4. Taking Home Office Deductions

If you have a side business, then you are eligible to get the home office deductions. In this way, you can cut the % of your home used for business under the law (Schedule C, 1040). For instance, you’re using the guest room exclusively as a home office, which makes up 1/3 of the entire living space, then you can deduct 1/3 of the utility fees and rent for your home office.

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5. Self Employed

If you’re self-employed (full-time/part-time), then you’re automatically eligible for tax reduction scores. Some of these expenses include: advertising, website fees, business vehicle mileage, shipping, % of home internet bills used for business, office supplies, memberships, publications, business trips and any other cost incurred to run your business.

6. Social Security Tax

If you’re self-employed and pay 100% of the social security taxes owed, 15.3% can wave off 50% of the taxes paid. And to claim the tax deduction, you don’t even need to itemize.

7. Reimbursed Vehicle Expenses

This tax break is often overlooked. If you’re traveling to the satellite office and using your own vehicle, then you can wave off mileage costs. But you aren’t entitled to commuting costs deductions.

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8. The Lifetime Learning Credit

It’s another great tool for adults to boost up their education and training. This credit will give you a max of $2000/year, which is 20% if you have spent $10000 on your high school education program. You can use this money for your educational expenses.

9. Earned Incomes Tax Credit

When it comes to the earned income tax credit, it will lower down the overall tax bill, especially for lower and moderate income families.

10. State Sales Tax

It’s another type of tax break in which itemizers will get the opportunity to either wave off the state sales or state income taxes paid. It’s a great advantage for those who are living in a state without income taxes and looking for a tax-free gold.

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Above are some simple tips on how you can cut more on your taxes by understanding the laws and simple loopholes which can save you lots of dollars on your tax bill.

Featured photo credit: CCI mag via ccimag.be

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Adnan Manzoor

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Published on November 8, 2018

How to Answer the Tough Question: What are Your Salary Requirements?

How to Answer the Tough Question: What are Your Salary Requirements?

After a few months of hard work and dozens of phone calls later, you finally land a job opportunity.

But then, you’re asked about your salary requirements and your mind goes blank. So, you offer a lower salary believing this will increase your odds at getting hired.

Unfortunately, this is the wrong approach.

Your salary requirements can make or break your odds at getting hired. But only if you’re not prepared.

Ask for a salary too high with no room for negotiation and your potential employer will not be able to afford you. Aim too low and employers will perceive as you offering low value. The trick is to aim as high as possible while keeping both parties feel happy.

Of course, you can’t command a high price without bringing value.

The good news is that learning how to be a high-value employee is possible. You have to work on the right tasks to grow in the right areas. Here are a few tactics to negotiate your salary requirements with confidence.

1. Hack time to accomplish more than most

Do you want to get paid well for your hard work? Of course you do. I hate to break it to you, but so do most people.

With so much competition, this won’t be an easy task to achieve. That’s why you need to become a pro at time management.

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Do you know how much free time you have? Not the free time during your lunch break or after you’ve finished working at your day job. Rather, the free time when you’re looking at your phone or watching your favorite TV show.

Data from 2017 shows that Americans spend roughly 3 hours watching TV. This is time poorly spent if you’re not happy with your current lifestyle. Instead, focus on working on your goals whenever you have free time.

For example, if your commute to/from work is 1 hour, listen to an educational Podcast. If your lunch break is 30 minutes, read for 10 to 15 minutes. And if you have a busy life with only 30–60 minutes to spare after work, use this time to work on your personal goals.

Create a morning routine that will set you up for success every day. Start waking up 1 to 2 hours earlier to have more time to work on your most important tasks. Use tools like ATracker to break down which activities you’re spending the most time in.

It won’t be easy to analyze your entire day, so set boundaries. For example, if you have 4 hours of free time each day, spend at least 2 of these hours working on important tasks.

2. Set your own boundaries

Having a successful career isn’t always about the money. According to Gallup, about 70% of employees aren’t satisfied with their current jobs.[1]

Earning more money isn’t a bad thing, but choosing a higher salary over the traits that are the most important to you is. For example, if you enjoy spending time with your family, reject job offers requiring a lot of travel.

Here are some important traits to consider:

  • Work and life balance – The last thing you’d want is a job that forces you to work 60+ hours each week. Unless this is the type of environment you’d want. Understand how your potential employer emphasizes work/life balance.
  • Self-development opportunities – Having the option to grow within your company is important. Once you learn how to do your tasks well, you’ll start becoming less engaged. Choose a company that encourages employee growth.
  • Company culture – The stereotypical cubicle job where one feels miserable doesn’t have to be your fate. Not all companies are equal in culture. Take, for example, Google, who invests heavily in keeping their employees happy.[2]

These are some of the most important traits to look for in a company, but there are others. Make it your mission to rank which traits are important to you. This way you’ll stop applying to the wrong companies and stay focused on what matters to you more.

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3. Continuously invest in yourself

Investing in yourself is the best investment you can make. Cliche I know, but true nonetheless.

You’ll grow as a person and gain confidence with the value you’ll be able to bring to others. Investing in yourself doesn’t have to be expensive. For example, you can read books to expand your knowledge in different fields.

Don’t get stuck into the habit of reading without a purpose. Instead, choose books that will help you expand in a field you’re looking to grow. At the same time, don’t limit yourself to reading books in one subject–create a healthy balance.

Podcasts are also a great medium to learn new subjects from experts in different fields. The best part is they’re free and you can consume them on your commute to/from work.

Paid education makes sense if you have little to no debt. If you decide to go back to school, be sure to apply for scholarships and grants to have the least amount of debt. Regardless of which route you take to make it a habit to grow every day.

It won’t be easy, but this will work to your advantage. Most people won’t spend most of their free time investing in themselves. This will allow you to grow faster than most, and stand out from your competition.

4. Document the value you bring

Resumes are a common way companies filter employees through the hiring process. Here’s the big secret: It’s not the only way you can showcase your skills.

To request for a higher salary than most, you have to do what most are unwilling to do. Since you’re already investing in yourself, make it a habit to showcase your skills online.

A great way to do this is to create your own website. Pick your first and last name as your domain name. If this domain is already taken, get creative and choose one that makes sense.

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Here are some ideas:

  • joesmith.com
  • joeasmith.com
  • joesmithprojects.com

Nowadays, building a website is easy. Once you have your website setup, begin producing content. For example, if you a developer you can post the applications you’re building.

During your interviews, you’ll have an online reference to showcase your accomplishments. You can use your accomplishments to justify your salary requirements. Since most people don’t do this, you’ll have a higher chance of employers accepting your offer

5. Hide your salary requirements

Avoid giving you salary requirements early in the interview process.

But if you get asked early, deflect this question in a non-defensive manner. Explain to the employer that you’d like to understand your role better first. They’ll most likely agree with you; but if they don’t, give them a range.

The truth is great employers are more concerned about your skills and the value you bring to the company. They understand that a great employee is an investment, able to earn them more than their salary.

Remember that a job interview isn’t only for the employer, it’s also for you. If the employer is more interested in your salary requirements, this may not be a good sign. Use this question to gauge if the company you’re interviewing is worth working for.

6. Do just enough research

Research average salary compensation in your industry, then wing it.

Use tools like Glassdoor to research the average salary compensation for your industry. Then leverage LinkedIn’s company data that’s provided with its Pro membership. You can view a company’s employee growth and the total number of job openings.

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Use this information to make informed decisions when deciding on your salary requirements. But don’t limit yourself to the average salary range. Companies will usually pay you more for the value you have.

Big companies will often pay more than smaller ones.[3] Whatever your desired salary amount is, always ask for a higher amount. Employers will often reject your initial offer. In fact, offer a salary range that’ll give you and your employer enough room to negotiate.

7. Get compensated by your value

Asking for the salary you deserve is an art. On one end, you have to constantly invest in yourself to offer massive value. But this isn’t enough. You also have to become a great negotiator.

Imagine requesting a high salary and because you bring a lot of value, employers are willing to pay you this. Wouldn’t this be amazing?

Most settle for average because they’re not confident with what they have to offer. Most don’t invest in themselves because they’re not dedicated enough. But not you.

You know you deserve to get paid well, and you’re willing to put in the work. Yet, you won’t sacrifice your most important values over a higher salary.

The bottom line

You’ve got what it takes to succeed in your career. Invest in yourself, learn how to negotiate, and do research. The next time you’re asked about your salary requirements, you won’t fumble.

You’ll showcase your skills with confidence and get the salary you deserve. What’s holding you back now?

Featured photo credit: LinkedIn Sales Navigator via unsplash.com

Reference

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