When you have income coming from multiple sources, it can make taxes a bit complicated. Whether you have more than one job, investments, a business or other sources of income, you want to make sure you’re maximizing your tax savings. Luckily, there are several things that you can do to help lessen the tax burden that can often be a reality when you’re dealing with multiple income streams. Mark Dicus & Company is here to share some tax saving tips that will hopefully help you do just that.
How to Save on Your Taxes with Multiple Income Streams
We would like to go over a few different ways you can maximize your tax savings when you’re working with multiple income streams.
– Understand Different Tax Rates: Not all income sources are taxed the same way. If you have long-term capitol gains from a property that you owned for more than a year, this income is usually taxed at a lower rate than wages you earned from a job. When you know and understand these different tax rates, you can plan accordingly to help maximize your savings. Working with an accountant is usually the best way to ensure you’re taking full advantage of the rates that are available to you.
– Take Advantage of Tax-Advantaged Accounts: Taking full advantage of tax-advantaged retirement accounts can help reduce your taxable income. These accounts include 401K accounts and IRA accounts as well as health savings accounts and flexible spending accounts. These accounts can help reduce your total tax liability.
– Choose the Right Business Structure: If you own and run your own business, choosing the right business structure is important and can impact your taxes. Whether you choose an LLC or S corporation depends on several factors and the type of business you have. It’s always best to make sure you’re working with a tax professional that can help you decide which one is best for your circumstances.
– Passive vs. Active Income: Understanding the difference between passive and active incomes can have a large impact on your taxes. Active income is money that comes from earning wages at a job. Passive income comes from sources like real estate, royalties, and companies that you aren’t taking an active role in participating in.
– Take Advantage of Available Tax Credits: Make sure you’re taking full advantage of tax deductions and credits that are available to you as well. This includes standard deductions, charitable contributions, mortgage interest, state and local taxes.
Tax Preparation, Filing, Planning & More in Salt Lake City, St. George, West Valley City, Provo, Orem, West Jordan & Greater Cedar City, Utah
If you have questions or need assistance when it comes to maximizing the tax savings available to you, you can turn to Mark Dicus & Company to help you sort it all out. We will help you look at the big picture to make sure you aren’t missing any savings that you could benefit from. We work to keep as much money in your pocket as possible. Call us today!