Another tax year has come to an end, sort of, except for those who filed an extension and many taxpayers are wondering how to keep up with the new Tax Cuts and Jobs Act to get the most out of next tax year in order to pay less tax.
If you are trying to find out alternative ways to pay less tax, you came to the right place. The biggest change to the tax system was the increase in the standard deduction. It is nearly doubled now, standing at $12,200 for every taxpayer to use. Before the increase, about 60% of the American taxpayers were taking the standard deduction as the main way to reduce their taxable incomes. This number is expected to go as high as 90% with the increase. While most taxpayers are unaware of the deductions they still can take even without itemizing. There is a misconception among the taxpayers that once they take the standard deduction, all the doors for any other deduction closes. This is can be the farthest thing from the truth as there are deductions anybody can claim if they are eligible for it. These are called above-the-line deductions. To learn more about these types of deductions, you can click the link below.
On the other hand, itemizing is another option, but to do this you need to calculate all of your itemizable expenses and keep your receipts altogether. As it stays out obvious, you should only take itemizing as long as the amount exceeds the standard deduction amount. While there are possibly more than 100 ways to reduce your taxable income by itemizing, there are common ones that pretty much applies to everyone.
All of these comes down to only one thing, to get the most out of the next tax year and to pay less tax, you need to lower your taxable income as much as you can so you fall into tax brackets with lower tax rates.