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Tips For Saving Money On Your Taxes


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    Everyone could use some tips and or reminders on how to possibly maximize a return, or break even when it comes to filing their income taxes. Credits and deductions are great place to start, but there're other things you could do to make sure everything is on the up and up. Let's start with these five shall we? Let's start with the most obvious two first.

    1. Tax Credits - Tax credits really come in handy for those who qualify because they can reduce what you owe dollar-for-dollar. Two Examples: Families with qualifying children under the age of 17 can get up to $2,000 deducted from their federal income taxes. For those with low income, the earned tax credit can get you as much as $529 in credit, and even more if you have children who qualify.

    2. Deductions - Requirements have gotten stricter on those who decide to itemize, but it's still worth looking into. Things such as medical expenses can be deducted if they were greater than 7.5% of your AGI. You can still claim donations for charity as well.

    3. Boost your contributions to your retirement. - For those who have an IRA, contributing as much as you can to it can directly reduce your taxable income. Plus you're saving for retirement while you do it.

    4. Contribute to a health savings account (HSA) - If you have a health plan with a high deductible, this too can reduce your taxable income.

    5. Check your withholding - The IRS changes and updates their withholding tables. With these changes, you should make sure you're not withholding too much, or too little, this could determine if you will owe money or receive a refund.

    What are some other tips/tricks that were included in the list above?

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    Write-offs are what I look at. I write off student loan interest payments and business expenses like partial rent and utilities as I work from home. Travel too, if that ever comes up. Is true though, itemizing in general is a lot harder with Trump raising the standard deduction and all.
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    My wife and I make sure to deposit the maximum amount we are legally able to into our Health Savings Account and also invest the maximum amount we can to my IRA and her 401k. I'm also able to claim a number of deductions since I work from home full-time. Add it all together and our tax burden is significantly lower.

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    Does anyone know any helpful tips with the stimulus and filing taxes this year?