Another Tax Savings Trick or Tip<\/h3>\n\n\n\n
There really are no tax tricks.\u00a0 There are only taxable items, non-taxable items, and tax deductions.\u00a0 The trick to lowering your taxes is to make sure that you make all three categories work for you.<\/p>\n\n\n
![\"tricks](\"https:\/\/financegourmet.com\/blog\/wp-content\/uploads\/2023\/02\/save-money-on-taxes.jpg\" "\\"\\"")
<\/figure>\n<\/div>\n\n\nOne area where many people could use a tax tip to lower their taxes is in the realm of tax deductions.\u00a0 For example, traditional IRA contributions may be taxable<\/a>. You see, most tax deductions are simply set in stone, either you get them, or you don’t.\u00a0 You really can’t go around trying to get them.\u00a0 For example, going to college to get a college tax credit doesn’t make any sense.\u00a0 If you are going to college, then of course you would claim the credit.\u00a0 But that is the point, either you already are getting it, or you are not.\u00a0 There is no trick.<\/p>\n\n\n\n So, then what are we doing here?<\/p>\n\n\n\n The exception to this rule is owning your own business. Having a business is one of the best tricks to save money on taxes.\u00a0 With your own business, you get to file a Schedule C and on Schedule C, there are literally hundreds of things that become tax deductible that are not deductible on your taxes anywhere else.<\/p>\n\n\n\n Too late to start a business to lower your 2022 taxes? <\/p>\n\n\n\n Technically, yes, but that doesn’t mean there is no money saving tax trick here.\u00a0 Look back over your 2022 and see if there is somewhere where you can demonstrate a legitimate profit motive.\u00a0 That is, are there activities that you engaged in during 2022 that you could legitimately look someone in the eye and say, “I did that to make money.”<\/p>\n\n\n\n If so, then you have a business. Combine all of those up into a single grouping, and maybe you even have a profitable business. Now, virtually everything you did in order to make money on those activities, from purchasing new office supplies or equipment, to milage driven to look at something you needed, to meals eaten out with others who could help make your business profitable all become profitable.<\/p>\n\n\n\n Don’t worry if you were not profitable in 2022. Most businesses are not profitable in their first year. In fact, most businesses are never profitable because 2\/3 of them fail within the first three years. That doesn’t mean you can’t claim your deductions.<\/p>\n\n\n\n