That time of the year is approaching. Yes, there are two things guaranteed in life; death and taxes. But just like anything else in life, adequate preparation can help get anyone through even the less than pleasant of life’s aspects. Sitting down and analyzing your income is one of the first steps to financial security. Next, it is a good idea to take a look at tax shelters. A tax shelter will help reduce how much tax you pay the federal government by reducing your taxable income. The lower your taxable income, the less you will pay in taxes.
Many legitimate tax shelters are available. These shelters include:
401(k) and 403(b) plans
setting up your own business
employer-sponsored health coverage
employer-sponsored life insurance
Investing in real estate is a common and beneficial tax shelter. Remember, tax avoidance is legal, tax evasion is not. By utilizing legal and legitimate tax shelters, you are avoiding taxes and thus may be able to save money and build wealth.