There are a lot of things in life that can get in the way of saving, paying bills on time, and having enough money left over for extras. But one of the more controversial of these things is the requirement to pay taxes. We all work hard for our money, and when Uncle Sam comes along and takes a huge bite out of your paycheck it can be hard to make ends meet. When your take home pay is not enough to cover all of your expenses, you might consider what options you have to get back on track. One option is to file for bankruptcy, which will either eliminate or reduce your debts significantly. When you have less debt, your take home pay suddenly goes farther. But what if your take home pay were more to begin with, would that help you stay on top of things?
A lower tax rate may mean you have more in your bank account after each paycheck is deposited, but it might not necessarily solve all of your financial needs. Here are some things to keep in mind when you are thinking about how to lower your tax rate to help avoid filing for bankruptcy:
• A lower rate may only have a lasting impact at tax filing time, and may not be realized on your weekly paycheck. That means your take home is still not enough, and bankruptcy could be your answer.
• A lower tax rate might not take into account other factors regarding your tax filing status, and thus have little affect on your overall financial condition.
• Paying less in taxes could mean you pay more for other necessities. If your money is increased by paying less in taxes, but increased in other areas you will still have difficulty paying all of your bills.
Of course lower taxes are appealing to all of us, but any proposal to change the tax brackets should be looked at in conjunction with your entire financial situation. And while paying lower taxes can help you in the short term, if you have more debt than is manageable the impact of lower taxes may not be lasting.
For more information about how to handle overwhelming debt, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.