When tax preparation time arrives, you don’t want to be caught off guard. While everyone craves the biggest possible refund, certain rules limit deductions at higher levels of income. Thankfully, the experienced tax accountants at Hal Surratt CPA can help you understand the fundamental rules and the ways in which they apply to you.

Income Brackets That Restrict Deductions

If your adjusted gross income is $259,400 or higher as a single filer, or $311,300 as a married couple filing together, you exceed the maximum income to qualify for many deductions. For couples who are married but filing separately, the limit is $155,650. If you’re in these income brackets, many major deductions will be reduced by 3%. While your tax accountant can still include them, you’ll receive less of a break than you would with a lower income. Depending on how large your deductions are, this could raise your tax bill up to thousands of dollars.

Strategies For Reducing Adjusted Gross Income

No one is aiming to make less money in their profession, but there are certain strategies your bookkeeper can suggest for you to—lawfully and truthfully—report a lower adjusted gross income. In turn, these modifications may enable you to enjoy greater deductions. One way is to open a Health Savings Account, or HSA, since contributions to these accounts are non-taxable. You can only use money in an HSA for health care, but in addition to the tax benefit, it’s an excellent way to save money for medical costs. Tax-exempt retirement plans are also a great way to save for the future while reducing your reportable adjusted gross income.

Still confused? Everyone knows how complicated taxes can get, which is why you need a seasoned tax preparation expert on your side. Hal Surratt CPA has provided professional and knowledgeable expertise to residents of the Archdale, NC, area for over a decade. To learn more about their services, call (336) 861-4024 or visit the website.