Which of the following tax planning strategies could Joseph consider to reduce his future tax bills?

Question

For many years Joseph paid someone else to file his income tax return. After taking a personal finance course at his local college, Joseph feels he is ready to tackle it on his own for tax year 2014. Joseph is single with an income of $43,000 and has no dependents. He has little interest income from savings, does not have a personal IRA, and plans to itemize deductions. Joseph owns a home and travels a lot with his job. He pays some of his own work-related expenses because his employer does not pay for all of them. His only personal investments include 1,500 shares of stock he inherited from his uncle, which he does not intend to sell for many years because the blue-chip company has a strong history of dividend income and share price appreciation. However, he does contribute monthly to his 401(k) plan at work.

A) Carefully track and maintain records for all itemized deduction categories to insure he is maximizing his itemized deductions.
B) Establish a home equity credit line to finance other consumer credit, such as an auto purchase.
C) Contribute as much as possible to a tax-deferred retirement account, such as his 401(k).
D) Invest in municipal bonds to receive tax-exempt income.
E) All of the above would be strategies available to Joseph to reduce his future taxes.

Answer 1

Answer: E