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8 Easy Ways To Cut Your Taxes Now

8 Easy Ways To Cut Your Taxes Now

Deduction on Extras
If you have any items lying around the house you are not using, such as old clothes or furniture, give them away for free and get a deduction for your taxes. When giving them to a charity, make a list of your donations along with their value, giving one copy to the charity and keeping one for yourself.
2. Retirement Savings
By adding money to a 401(k) or IRA fund, you save money on taxes due to the lack of taxation on those funds until they mature. Someone placing $1,000 into a 401(k) is saving roughly $250 on taxes. Along with the financial advantages of retirement funds, tax savings help boost your returns in the long-run.
3. Mortgages
If you can manage to pay your mortgage before the start of the New Year, you can use the interest as a deduction on the year’s returns. The same applies for property or other real estate-related taxes.
4. College Claims
There are tax credits for families with kids in college, such as the American Opportunity Tax Credit. These usually save a few thousand dollars per student in taxes. Not only do the tuition fees count, but any major purchases made for your kids to use at college are included, such as new laptops.
5. Charitable Contributions
If you have any stocks or bonds you are not particularly attached to, it is a good idea to give those to charity, instead of donating money. When a charity sells a stock or bond, they do not pay taxes. If you sold the asset and gave away the money, you’d end up with a smaller donation and this means less money for the charity too.
6. Medical Expenses
There are savings in the tax code for medical expenses, when those expenses reach around 10 percent of a person’s income for the year. If there are any minor procedures you need, such as dental work, getting them done before the end of the year might be a good idea. While some procedures may give you a net financial loss, it is still better to get the procedures done now and receive the tax benefit, instead of waiting until the next year.