These five steps can help you save money, stay organized, and prepare for tax season with less stress.
1.Deduct
Deducting means subtracting certain expenses from your income, so you pay less tax.
Common deductions include:
- Office supplies
- Internet and phone bills
- Travel for work
- Business meals
- Software or tools used for work
To use deductions, keep all your receipts and record your spending clearly. Even small expenses can help lower your tax bill.
Need help tracking deductions? Check out our Full-Service Bookkeeping support.
2.Defer
Deferring means delaying income or tax payments to a later time.
For example, if you get paid in January instead of December, that income counts for next year’s taxes.
This can help you stay in a lower tax bracket this year. Defer when it makes sense, especially if your income changes from year to year.
Talk to a bookkeeper or tax pro to know when this works best. Our Tax Preparation & Planning services can guide you.
3.Divide
Divide your income or assets in smart ways to lower your taxes.
If you run a business with a spouse or partner, sharing income may reduce the total taxes you both pay. Some people also divide income through family trusts or by paying family members who work for them. But be careful, rules apply, and you must follow the law. Always ask a tax expert before doing this.
4.Disguise (Legally)
This sounds tricky, but it means changing how income is labeled to reduce tax.
For example, sometimes income can be marked as capital gains, which are taxed less than regular income. This only works in certain cases and must be done legally. It’s not about hiding income, it’s about using the tax rules in your favor. Ask about our Mentorship & Assistance program if you’re not sure.
5.Dodge (Legally)
This means avoiding extra taxes by following smart strategies. You’re not breaking rules, you’re using them the right way.
Examples include:
- Using tax free savings plans
- Claiming all your deductions
- Hiring a good bookkeeper or accountant
- Planning early instead of waiting
Visit our homepage to explore services that help you stay ahead of taxes and avoid stress.
Final Thoughts
The 5 D’s of tax planning; Deduct, Defer, Divide, Disguise, and Dodge can help you save money and feel more in control. Tax time doesn’t have to be scary.
With a little planning and the help of trusted bookkeeping services, you can make tax season easier and smarter.