Chapter 12 Planning your tax strategy

1
Chapter 12Planning your tax strategy

• Section 12.3
• Tax Assistance and strategies

2
Tax Assistance

• As your personal finances become more complex so
  will your tax preparation
• You might need help
• IRS website
• Books (Taxes for Dummies)
• Software
• Professionals

3
Tax Audits

• Tax Audit a detailed examination of your tax
  return by the IRS
• If you receive and audit notice
• You have the right to request time to prepare
• You may ask for clarification on the items in
  question
• Arrive for your audit appointment on time
• Bring only relevant documents
• Answer the auditors questions with clear,
  complete, and brief answers
• Be positive
• Bring your tax preparer, accountant, or lawyer if
  youd like.

4
Consumer Purchasing Strategies

• Buying decisions you make can affect the amount
  of taxes you pay
• If you purchase a house, your interest is tax
  deductible
• Job related expenses can be tax deductible
• Union dues
• Travel expenses
• Educational expenses
• Tools

5
Investment Decisions and Retirement Plans

• Certain investment decisions may also reduce your
  income tax
• To encourage early planning the government allows
  you to defer paying taxes on money that you
  invest in retirement plans
• You dont have to pay interest on this money
  until you withdraw it.

6
Changing your Tax Strategy

• People pay taxes because they are require to do
  so by law
• As tax laws change, your strategies should change
  too
• Take advantage of new tax laws that may reduce
  the amount you pay