10 Easy Ways To Undermine Big Government – A Citizen’s Guide

Save money on taxes and fees

Keith Farrell

The government is big and getting bigger. Last week, federal agents from the EPA heavily armed and wearing police uniforms raided a town of about 17 people. That will be one of about 80,000 SWAT style raids that will occur in the US this year. The national debt stands at around $16.7 trillion dollars and with the current debt ceiling debate, it doesn’t look like it’s going down anytime soon. So what’s the average citizen to do if they’re concerned about limiting government but don’t want to pick up a molotov ? Here’s a list of little things that you can do every day to help undermine the state.

1. Make 401K Contributions – Contributions to your 401K do not count as taxable income.  In 2013 Americans can contribute up to $17,500 to a 401K.  That number is higher for Americans over the age of 50.  A great way to lower your taxable income while planning for your future.
2. Give to Charity– Charitable contributions can be deducted from your taxable income if you itemize your deductions.  If you do some investigation you can find a charity that is right for you.  While this doesn’t equate to more money in your pocket, it is a good way to support the kind of initiatives you like without growing government bureaucracy.
3. Shop Smart– Prepared or processed foods often have sales tax, while unprepared foods do not.  Buying the raw ingredients and making something yourself is usually cheaper than buying the prepared product, anyway, and it avoids sales taxes.  A russet potato, for example, sell for $0.69 each.  Compare that to a 15oz box of prepared mashed potatoes at $2+ a box.  Preparing the food yourself is not only cheaper, you get a better tasting meal and don’t have to pay sales tax.
4. Vote with Your Feet– Some states pay less taxes than others.  The beauty of living in a federalist country with 50 states is that you can choose to live in a state with a lesser tax burden if you please.  Here are 7 states that don’t have state incomes taxes.
5. Get Resale Tax License and Avoid Sales Tax – EBay offers great tips on obtaining your state’s Resale Tax License.  Basically, for a little extra paperwork and a fee, you can get out of paying sale taxes on things you buy from local retails as well as items you purchase of EBay.
6. See if your Employer Provides Tax-Free Commuter Benefits – Commuter benefits is one of the eight fringe benefits your employer can provide as tax-free income.  Eligibility of such benefits depends on the distance you commute from your home to work.  Depending on what your employer offers, you can take advantage of money for traveling and parking, even if you ride a bike.  See this IRS page for more details.
7. Use Credit Cards to Your Advantage – Many credit cards have cash-back or rewards programs.  This money is generally tax-free because it is considered a rebate or a reduction on a sale price.
8. Start a Small Side Business – Starting a small business, even from your home, with the intent of making a profit allows for things such as a home office, phone bills, travel expenses, and other materials to be deducted from your taxable income.  However, if you fail to make a profit after two or three years, the IRS may declare your business a ‘hobby,’ at which point some of your expenses may be subject to a 2% tax.
9. Have a Garage Sale or Tag Sale – In most states, as long as you are not selling an item for more than you purchased it, revenue from garage or tag sales is not taxable.  This is a great way to free up space in your home or garage while generating some quick, tax-free cash.
10. Rent Your Home for Fewer than 15 Days – If you rent out a property which you use as a home to an individual for fewer than 15 days, the IRS does not require you report this income.  Of course this means any costs incurred during the rental are not deductible.  It still allows for some extra side revenue you don’t have to tell Uncle Sam about.

This is by no means a comprehensive list. But it’s a great guide to get you started in taking an active part in limiting the growth of big government. What other tips can you think of? Leave your comments and suggestions below.