Income Tax Savings Tips

You could be eligible to receive an additional $1,500, $5,000, or even $7,500 in tax credits when you file your next tax return. How do you know how to claim tax credits and other tax savings?

The easiest way to claim credits and deductions is by using tax software and following simple tax filing guide.

15 Simple Tax Saving Tips

1. Submit an updated W-4 to your employer or employers.
2. Contribute to traditional IRA, 401(k), 403(b), or other retirement accounts.
3. Contribute to other tax-deductible accounts such as an HSA of FSA.
4. Open and contribute to a 529 college savings plan.
5. Review your investment portfolio for losses that may offset your taxable gains.
6. Start your own business and write off deductible expenses.
7. Purchase a qualifying electric or hybrid vehicle for a tax credit of up to $7,500.
8. Make energy efficient improvements to your home and claim a tax credit.
9. Educate yourself, a spouse, or dependent and claim an education tax credit.
10. Donate to charity if you plan to itemize your deductions.
11. Keep track of your medical and dentals expenses for itemized deductions.
12. Track your home mortgage insurance payments plus state and local taxes.
13. Wrap up your tax planning by December 31 - some until April 15 of next year.
14. Use eFile.com to claim tax credits and tax deductions that you qualify for.
15. File your taxes on time in case you owe taxes.

Key Takeaways

• Regularly update your W-4 form to match your current tax situation. This ensures you're withholding the right amount from each paycheck, preventing surprises at tax time and maximizing your take-home pay.
• Contribute to retirement accounts like IRAs and 401(k)s. Not only do these contributions lower your taxable income now, but they also help secure your financial future with potential tax-deferred growth.
• Keep thorough records of deductible expenses such as medical costs and mortgage interest payments throughout the year. This ensures you can claim all eligible deductions, maximizing your tax savings.
• Invest in energy-efficient home improvements, electric vehicles, or educational expenses to qualify for tax credits. These credits directly reduce your tax bill, providing savings while promoting green initiatives or education.

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Wage or salary earners should monitor their tax withholding per paycheck. What you enter on the W-4 won't reveal its impact on your next tax return until you file. For instance, if you expect a tax refund this year, you might reduce withholding to increase your paychecks now. Balancing this is key. eFile.com provides free tax tools and calculators to help find optimal withholding.

• Use the paycheck calculator or PAYucator to assist with your Form W-4, allowing you to keep more money throughout the year instead of waiting for a refund.
• Set tax return goals by reviewing how to balance your finances via Form W-4.

Find ways to save on taxes through maximizing tax-free income, saving money in your daily life, and taking note of expenses, you may be able to deduct or get a tax credit for.

How to Save on Taxes?

There are a variety of ways to keep your money both during the year and when you file your taxes. Throughout the year, you should focus on adjusting your W-4 so you can keep your money during the year, contributing to deductible accounts, and selling any stocks that are weighing down your portfolio so you can write the loss off on your taxes.

By tax time, gather all your applicable tax forms and documents, estimate your tax return, and use online tax filing software to help you claim all the tax credits and deductions you may not know you qualify for. If your tax planning has gone well, you may end up with a well-balanced tax return and large paychecks during each year.

Start Federal and State Tax Returns

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Save money during the year by investing, saving, and maximizing nontaxable income. Review the sections below to learn how to save money during the year and how to get back overpaid taxes when you file your return.

Put your tax planning into action and estimate your next Tax Return with the easy-to-use tax estimator and calculator. To get the most out of your Tax Refund, prepare and e-file your Taxes with eFile.com and TAXercise your paycheck!

Filing taxes online is a simple way to maximize tax savings since online tax filing software claims the credits and deductions for you. Use eFile.com to file your taxes online and see if you may qualify for free online tax filing.

Keep up to date with changed, extended, or canceled tax breaks.

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