During these troubling times, it’s never been more important to save money. While there’s no way out of paying taxes, there are plenty of ways you can pay less and put that money aside.
Are you wondering how you can reduce the taxes you pay?
Keep reading to learn all about 5 pro tips for how to pay less taxes this tax season.
1. Get a 401(k)
Simply put, you can pay less taxes when you have less taxable income. This is why many people get a 401(k).
When a part of your salary is transferred to the 401(k), it can’t be taxed by the IRS. This is a great way to save for retirement and save money in general while doing nothing more than your regular job.
In most cases, you’ll get a 401(k) that’s sponsored by your employer. If you’re self-employed you shouldn’t worry because you can still get one.
2. Write Off Medical Expenses
If you’ve been hit with a lot of medical expenses, you can get some of that money back by paying less in taxes.
Whether you’ve had a broken arm or several cavities that needed fixing, you should hang on to all of your receipts.
In this case, the catch is that you can only reduce the amount of taxes you pay if your medical expenses are 7.6% or more of your adjusted gross income.
3. Apply for a Solar Tax Credit
More and more people are going green by getting energy for their homes from the sun. Not only can you save on your energy bill by going solar but you can potentially save on your taxes.
If you have a federal tax liability and own both your home and your solar panels, then you could get a solar tax credit. To learn more, you should check solar tax credits by state.
4. Alter Your W-4
Fortunately, W-4s aren’t written in stone. One way you can pay less in taxes is by raising or lowering your withholding so that it’s just right.
If you received an abundant tax refund last year, you should reduce the withholding so that you can have more spending money throughout next year.
On the other hand, if you were hit with a large tax bill last year, you can prevent that by raising the withholding on your W-4.
5. Purchase Your Dream Home
Buying a house might sound counterproductive but you’ll probably be able to deduct property tax and mortgage interest from your taxes.
That way, you can pay less in taxes while you invest in a home rather than letting that money go to waste on rent.
Now You Know How to Pay Less Taxes
With these 5 pro tips, you’ve learned all about how to pay less taxes this tax season. Now the only problem you’ll have is figuring out what to do with that extra cash.
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