Wednesday, August 17, 2005

Tax Savings through tax cost averaging

When it comes to income tax, most people view it as a once a year dreaded task.

For most people, it may be worthwhile to look at income tax with a longer horizon and look for ways to reduce the amount of taxes you pay over the long haul to maximize your deductions, and structure your income sources so that you pay the lowest amount of tax possible not just this year but, in future years too.

It may be worth your while to sit down with a qualified tax advisor and develop a tax savings strategy that will lower your tax burden and increase your aftertax income.

Consider the impact of reducing your income tax by 20% per year for the next 10 or 20 years if you are like most people who simply fill in the forms without seeking out available deductions, or fail to look at the tax implications of your investments then chances are, you are paying too much tax and could be saving simply by paying closer attention to your income sources and identifying opportunities for deductions.

Remember, not all income sources are taxed equally, so look closely at how you can generate parts of your income from lower tax bracket sources.


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