How to Legally Pay Less in Taxes – EP 198

We know we can’t avoid death or taxes, but it sure is worth considering how to prolong life… and pay less in taxes (legally of course). We’re taking a look at some of the lesser-known ways we can see a lower tax bill at the end of the year based on the nuanced situations in which we may find ourselves!

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Disclaimer: We are not tax professionals, we do not give tax advice, this episode is for educational purposes only and if you think something applies to you, double-check it with your tax software or CPA.

Headlines

This article from US News outlines some of the lesser known tax codes we could be taking advantage of to see a lower tax bill at the end of the year!

What Jen and Jill have to say:

  • Contribute to retirement account
  • Open a health savings account (triple tax advantage)
    • frugalfriendspodcast.com/starship
  • Claim home office deduction
  • Deduct half of your self-employed taxes
  • See if you qualify for an earned income tax credit
  • Make charitable contributions
  • Use side hustle to claim business deductions
  • Write off business travel expenses (while on vaca) – only if have a side business
  • Get credit for higher education
    • The American opportunity tax credit can be claimed for the first four years of college and provides a maximum credit of $2,500 per student per year.
  • Itemize state sales (can deduct the sales tax paid on items) – for those who itemize their taxes rather than taking standard deduction

More Headlines:

This article from Turbo Tax gives us 5 ways to see a higher tax refund.

More from Jen + Jill:

  • 1. Rethink your filing status
  • 2. Embrace tax deductions
  • 3. Maximize your IRA + HSA contributions
  • 4. Timing can boost your tax refund 
    • Look for payments or contributions you can make before the end of the year that will reduce your taxable income.
  • 5. Become tax credit savvy

BILL OF THE WEEK –  Thank you Natashia for sharing your bill about Christmas gifts and how you decided to repurpose belongings into gifts for others!

If you want to submit your bill of the week visit frugalfriendspodcast.com/bill to leave us a bill

This bill is brought to us by Debt.com, if you’re starting 2022 with more debt than you’d like to have, you’re not alone. But there is help out there. Debt.com is one of the top resources we trust to help people get out of debt. From financial education, guides, and even options for nonprofit credit counselors, debt negotiation, to other relief programs. If you’re struggling with your debt payoff, visit Debt.com to access their resources on paying off debt, improving your credit, and see if they have programs that can help you. When Life Happens – Visit Debt.com to get the relief you need. Or call (844) 427-0411 to get a free consultation with a debt relief specialist.

Lightning Round 

How we save on taxes:

  • Jen-  We use an accountant!
  • Jill-  I moved to Florida where I DON’T HAVE TO PAY STATE AND LOCAL INCOME TAX ANYMORE!!!!!!!!!

Wrap-Up:

Thanks so much for listening! Keep leaving us reviews on iTunes or Stitcher, and sending the screenshot to frugalfriendspodcast@gmail.com AND share our most recent episode on social for a chance to win a copy of the Frugal Friends Workbook!

Thanks for listening! See you next week!

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