Everybody wants to reduce their taxes, but many people don’t know everything there is to know about tax deductions. People often regret when they realize they forgot to include a tax deduction that could have lowered their tax bill and increased their tax refund. For example, many people are unaware that charitable gifts, paying babysitters, and in some cases, even sales taxes are deductible. Dorothy Lawrence believes this is especially true in cases where people decide to do their taxes on their own without the professional help of a tax attorney. Dorothy is a tax and bankruptcy attorney in Dripping Springs, Texas. She is also a licensed attorney in Louisiana. Dorothy is the founder and CEO of the Dorothy Butler Law Firm and a member of many lawyers’ associations, including but not limited to Texas Bar Association, Louisiana Bar Association, Texas Young Lawyers Association, Travis County Women Lawyers’ Association, and many more.
Standard Deductions Vs. Itemized Deduction
Dorothy Lawrence believes that people need to know more about standard deductions and itemized deductions. She regularly explains such topics to the general population on her blog and on her Instagram page. The Standard Deduction, she says, is a direct deduction that Americans are allowed to take from their tax returns or total annual income. In some cases, individuals or couples can itemize their deductions. For example, you can take itemized deductions for mortgage interest, property taxes, state income taxes, charitable donations, and medical expenses.
Which One to Pick?
People often can’t decide whether to go for standard deductions or itemized deductions. Dorothy suggests a simple solution to this. She believes people should calculate both standard and itemized deductions and then claim the itemized deductions if they are greater than the standard deduction. This is what she and her firm help clients with.
Legally Accepted Ways of Reducing Income Tax
One of the people’s financial concerns is deciding how to lower their taxable income. Dorothy suggests the following two ways as the best legally accepted ways in which you can reduce your income tax.
Donations
Dorothy believes that donations can be one of the greatest ways to reduce the burden of income tax. Donations are deductible regardless of whether you make the donations in cash or donate some physical items. The important thing, she says, is to always keep receipts of the donated physical items that you want to donate. You must have all receipts of where you made the donations when you made them, and what exactly you donated, along with their approximate value.
Retirement Accounts
Another great way of reducing income tax is to set up a retirement account. However, the type of account one can set up depends on what type of income someone might receive. You can contribute to a retirement account through an employer-sponsored plan, or you can go for the Individual Retirement Account.
How Can the Dorothy Butler Law Firm Help You?
The Dorothy Butler Law Firm is fully dedicated to helping all taxpayers do their taxes in the best ways possible. Dorothy’s firm will help you reduce your income tax and maximize your refund by the greatest amount possible.