Tired of high tax bills? Exhausted from handing over so much of your income to the tax man? Here are three ways to keep more of your own money in your pocket this year…
Taxes Out of Control
Long Islanders are working longer and longer each year, just to pay taxes. This year we worked an average of 5 months of the year, just to pay taxes. Long Islanders work longer than most to fulfill this burden. The Treasury Department reports that the federal government collected a record amount of tax revenues in just the first 10 months of 2015’s fiscal year. Yet, despite bringing in more than $2.6 trillion, the government still ran an operating loss of $465 billion!
Thanks to many #fightfor15 protests wages seem to be growing. Yet, the system is so reliant on taxes that many workers are realizing that they are far better off working and earning less, and receiving more public assistance and breaks. But not everyone has that luxury, or feels it is the right move. Long Island homeowners might be hard pressed just to cover their mortgage and property taxes on $15 an hour. Never mind food or keeping the lights and heat on. Hopefully you don’t have kids and need to buy diapers or baby formula. It has been debated that strategies such as renting out part of your Long Island house on Airbnb might be a way to offset high property taxes. Yet, that can actually trigger more taxes. So what are some of the truly viable ways for Long Islanders to keep the tax man out of their pockets?
Contribute to an IRA
Contributing to an IRA can be a great way to reduce your annual income tax burden. In 2015 individuals can open and contribute $5,500 to a traditional IRA. This may even be doubled for married couples. Speak with your tax advisor first, but that could be $5,500 to $11,000 less you pay in taxes for this year! Even better, you not only get to keep that money, but are able to put it to work to make more money.
Roll Over to a Self-Directed IRA
If you already have a 401k or other individual retirement account rolling it over to a self-directed plan can potentially give you more control, safety, and earning power. You get to choose where your money is invested, and you get to enjoy tax deferred or tax free investment returns and growth. This can even include Long Island real estate investments.
Stop Overpaying Property Taxes
Property tax bills on Long Island aren’t just high, they are often incorrect. If half the property owners receive incorrect bills that entitle them to an appeal or reduction each year, the odds are that your property tax bill is overblown at least half the time. If you don’t like overpaying the tax man then challenging this tax bill should be on your checklist each year.