Tuesday, January 29, 2008

Tax thoughts

You'll pay more money in your lifetime on taxes than on anything else.They are a bigger expense than your mortgage, car, or yacht. Too many people spend too little time studying this topic and reducing their tax bill as much as they rightfully can. If that's been you, spend some time on the Internet educating yourself on tax deductions, talk to an accountant or CPA, or read some books.

One thing you can do right away: Adjust your withholding to reflect any changes or to more nearly match the taxes you need to pay. Overpaying taxes isn't smart. A big refund might feel good, but it isn't. You'd be just as well off to take that money and put it under your mattress for a year, then take it out and spend it.

If you're afraid it will disappear in every day expenses, open a savings account and set up an automatic deposit each month for the amount you'd be giving the government. You'll be earning interest on it, and, if you want to, at the end of the year when you pay your taxes, you can take it out and do whatever you would do with a tax refund... you'll have more of it to do with.

Another thing you can do is look over your expenses and turn every one that you can into a tax deduction. Don't think you can? Do some studying to find out. You might be surprised.

As Ben Franklin said so many years ago, "A penny saved is a penny earned."
I'm saying to you today, "A tax dollar saved is a tax dollar earned."

Assessing and planning for next year's taxes is a GREAT place to start!


  1. Or, more accurately, a tax dollar saved is more than a dollar earned...

  2. Yes. you're right, it actually is more than a dollar saved.