Higher taxes are coming. If you can’t avoid them, how can you keep up?
We’ve recently covered several ways in which taxes are likely to rise in 2021 and beyond. Federal income taxes, higher sales taxes, and rising property taxes are just some of them. Expect more new taxes ahead too. Now our governor has switched from saying we might need higher state income taxes, to we definitely will, and it is just a matter of how much. As well as hinting that it won’t just be on the wealthy, especially as many have already left.
3 Obvious Moves
Even more wealthy individuals, families and companies have fled the state in the past year. Most recently that includes Goldman Sachs announcing they will be moving a key division out of NY. That will leave an even bigger tax burden for those left behind, but not everyone can or wants to leave. Plus, with New Yorkers and Californians already having hiked property prices by 50% and even 1,000% in some parts of Florida may be running out of lower cost alternatives.
Getting a better accountant is another obvious step. If you’ve been trying to do your own taxes, or are already bewildered at making sense of last year and next year’s taxes, find the best CPA you can to be sure you aren’t overlooking breaks, and are maximizing savings.
Challenging property taxes is the third. In NY it is an absolute must to appeal your annual property taxes. At least unless you don’t feel you are being taxed enough yet.
Balancing Your Finances
If you can’t avoid surging taxes from all sides, what other options do you have for balancing your finances?
There are only two real choices. Either to increase your income or cut your expenses. Or you may need to do a little of both.
Some of the ways to do this in the next few months may include:
- Keep working from home, even if businesses open back up
- Open your own business for more tax deductions
- Find tax savings investments, like Tesla and Amazon which get huge tax savings
- Reskill yourself for the new economy with short online courses
- Focus on discount shopping, if it isn’t on sale, don’t buy it
- Pay off high interest rate debt, or refinance it with lower rate home loans
- Settle with creditors you know you won’t be able to keep up with and move on