ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Personal Finance»
  • Tax & Taxes

Tax Planning - Pay Less Taxes Overall

Updated on July 11, 2011

Strategies to Legally Pay less Tax,

No one gets out of paying taxes in the United States, but there are a few things to consider that could possibly make what you pay a little less in taxes. You can't just not file your taxes, as that would be breaking the law. Things like tax deferred or tax exempt investments, and taking full advantage of the tax laws are some things to consider. Year end tax planning can help as well.

Tax Deferred basically means that you don't owe on your earnings right now, if you don't have access or use of the money now. Money you earn that goes into deferred investments like a 401K or 403B or other retirement plans that qualify, can have the taxes held off to pay later when you withdraw the money. Certain IRAs and some annuities can also have the taxes deferred. I like this if for no other reason than I don't know what the future holds, so its possible I may never have to pay taxes if I am not around to use the money anyway. That makes sense to me. It will just take some planning ahead to know that you have to have enough to set aside to pay up when that time comes. One more way to look at it is that your tax rate most likely will be lower, so you will owe less.

Tax Deferred and Tax Exempt

Its possible to defer taxes that appreciate in value, just so long as you hold on to those investments. If you buy a certain stock, say for 7 dollars a share, and it goes up to 45 dollars a share, you only owe tax on that when you sell it.

Tax Exempt means that no taxes are due, period. Most tax exempt income is interest paid on municipal bonds (sold by local or state governments). You might live out of the state where bond was issued, and so you probably won't owe federal taxes on that interest you earn. You will owe them in your own state, however.

Selling Securities and Home Equity Loans

Some people avoid taxes on some or on all of their capital gains by selling their securities that are losing money. This is especially true if you think they are not worth holding on to for whatever reason. These kinds of losses might turn out to be valuable in offsetting your gains. Sometimes, it offsets your regular income as well. It is definitely something to think about.

On home equity loans, the interest is often deductible. The interest on consumer loans and credit cards are not, obviously, so it might pay to use your home equity credit if you really need to borrow some money. The main thing to watch out for in this case, is that you don't want to end up owing more than you feel comfortable repaying.


    0 of 8192 characters used
    Post Comment

    • oceansnsunsets profile image

      Paula 7 years ago from The Midwest, USA

      So glad you stopped by Treasuresofheaven. Thank you for your comment. I agree, its not a favorite topic but necessary.

    • Treasuresofheaven profile image

      Sima Ballinger 7 years ago from Michigan

      Good lesson on Taxes. Something I don't usually like to talk about, but necessary. Thanks for your research and the video. This is a much needed discussion. Thank you so much!


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: ""

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)