Increasing Your Wealth With A Tax Return

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taxAre you finished with your tax return? Wait a minute!

Before you lock your return away in your filing cabinet, be sure to take a second look at it. You may find some information that can help you save on taxes in the future.

I was recently reviewing a tax return for a retired businesswoman when I noticed something. About 50% of her income was interest income from certificates of deposit (CDs) and loans.

A steady income stream in retirement is certainly a good thing, so at first glance, things looked extremely positive for her.

However, there was a problem: Interest income is taxed at the ?ordinary income? tax rate ? the same rate at which wages from your job are taxed. Her retirement income was being taxed at the highest rate, and she didn?t realize there were other options available to her.

You see, not all income is taxed equally by the I.R.S. ?You definitely want to know if your investment funds are receiving the highest tax treatment, the lowest, or somewhere in between. ?Taxes can eat up a chunk your investment returns over the years, costing you thousands of dollars ? perhaps needlessly.

To learn more, I talked with W. Val Oveson, CPA, CFF, CGMA, partner at accounting firm WSRP in Salt Lake City, and former National Taxpayer Advocate for the I.R.S.

Oveson says that ?taxpayers may be able to cut taxes on interest and dividend income in half simply by taking an inventory of their tax return.

Read more at FORBES