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5 ways to save money on your taxes this year

Death and taxes are the two constants everyone must face, but that does not mean there is nothing you can do to make both more comfortable. As a tax-paying citizen, you have the right to do what you can to lower your taxes and minimize your obligations. Many Americans miss out on ways to cut taxes, but the following steps can help lower your liability as you plan for next year.

 

1. Start a college savings fund

 

If you have kids or plan to eventually, you can start a college savings fund. In 529 college savings accounts, the money grows tax-free, and you never must pay taxes on the earnings as long as they go toward tuition down the road.

 

2. Save for retirement

 

Increase your retirement contributions and take advantage of a lower tax burden because any money put into IRAs and 401(K)s are tax deductible up to a certain point. Not only do you enjoy the decreased tax burden, but you have also beefed up your retirement fund.

 

3. Keep track of your medical expenses

 

You may be surprised at how many of your medical supplies and expenses are tax deductible. Items such as bandages, breast pumps and acupuncture bills may be a tax write-off. Keep track of what you spend and keep a folder of all your receipts.

 

4. Make your home more energy efficient

 

If you have made changes to your home to make it more energy efficient, you may qualify for certain tax incentives from the government. For example, solar panels are eligible for tax credits.

 

5. Give your kids a gift

 

 You can deduct more than just charitable contributions. You can give each of your children a certain amount of money before you are required to pay taxes. 

 

Tax debt and liability can be a huge cloud hanging over your head if you cannot afford to pay. To ensure you are taking advantage of all your possible tax breaks, we encourage you to speak to a tax attorney today.

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