Hello Sophisticated Spenders!
Check out my post from 2011!
Some of these deductions no longer apply to me but the info is still very relevant!
Today I would like to share with you a few of the ways that I reduced my Adjusted Gross Income (AGI).
First I reduced my gross income by:
1. Contributing to my retirement account.
2. Making Charatable Contributions thru CFC (my employer).
3. Taking advantage of my company’s health savings account.
In 2010, I grossed approx $79,000. I reduced my Adjusted Gross Income to $68,000.
I reduced my Adjusted Gross Income by $10,000 by:
1. Having Rental Real Estate.
2. Paying Student Loan Interest.
3. Taking a dance class at the local community college
Next, I reduced my Taxable Income to $38,000 because I itemize.
Here are my items (get it, “item”ize):
1: State and Local Income Taxes.
2: Paying Real Estate Taxes.
3: Personal Property Tax (Virginia Drivers have to pay this) and Vehicle registration fees.
4: Home Mortgage Interest and Points.
5: Mortgage Insurance Premiums.
6: Gifts to Charity (Donations).
7: Tax prep fees (includes books, magazines, software, lawyer, accountant or tax preparer).
These are the tax advantages of owning your own home, going to college, saving for retirement, owning rental real estate and donating to charity. Spending all of your money on McDonald’s, Starbucks, Purses, Shoes and other “stuff” does not pay off. Try to spend a decent amount of your money on things that can pay you back (Income Producing Assets)!
Good luck and I wish you a big refund!
Wednesday I will share how I reduced my Taxable Income by 56% (My effective tax rate was 10%)!
Any other items that are missing from the list???