Ways to Lower Your Tax Bill

Because the tax code can be dense, and the rules are ever-changing, however, many people aren’t fully aware of all the legally allowed deductions.

Choosing the Right Filing Status

In many cases, a married couple will come out ahead by filing jointly. Typically, this will give them a lower tax rate.

Maxing Out Your Retirement Account

Generally, the lower your income, the lower your taxes. However, you don’t have to actually earn less money to lower your tax bill.

If you have a high deductible health plan, you may be eligible for or already have a health savings account (HSA), where you can set aside funds for medical expenses.

Adding to Your HSA

Saving for Private  School and College

If you have children who may attend college in the future, or who attend or will attend private school, it can pay off to open a 529 savings plan.

Making Student Loan Payments

You may be able to lower your tax bill by deducting up to $2,500 of student loan interest paid per year, even if you don’t itemize your deductions.

Selling Off Poorly Performing Investments

If you have investments in your portfolio that have been down for quite some time and aren’t likely to recover, selling them at a loss might benefit you tax-wise.

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