Is it Possible to Reduce Your Taxes?

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10/20/2020

Is It Possible to Reduce Your Taxes? - beBee Producer

  (/producer/edit/282359) Lou Mancusi (https://www.bebee.com/@lou-mancusi) in Personal Finance and Investing (/producer/hive/personal- nance-andinvesting), Economists and Finance (/producer/hive/economy(https://www.bebee.com/@lou-mancusi) nance), Finance / Banking (/producer/hive/ nance-banking-01387) Wealth Advisor • Noyes Wealth Management 54 min ago · 1 min read ·  ~10

Is It Possible to Reduce Your Taxes?

If you're faced with an unexpected tax bill, you might nd yourself panicking. It's important to stay up-to-date on your owed taxes throughout the year so you aren't taken by surprise later. Keeping track of your taxes also allows you to minimize them and claim as many deductions as possible. There are a variety of tips you can use to pay less in taxes. Always make sure that you qualify for the particular method before you use it. One option is to alter your W-4 (https://www.irs.gov/pub/irs-pdf/fw4.pdf) to re ect your current desires. This form is one that you give to your employer to tell them how much to withhold from your paycheck. If you raise your withholding on the form, you'll owe less once https://www.bebee.com/producer/@lou-mancusi/is-it-possible-to-reduce-your-taxes

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10/20/2020

Is It Possible to Reduce Your Taxes? - beBee Producer

the year is over. You can also tweak the form in the opposite direction if you had a massive tax return. By lowering the amount of money being withheld, you allow yourself to bring home more of your paycheck every time you're paid. Another popular way to reduce your tax liability is by saving money in a 401(k) plan. The 401(k) income isn't taxable, and if you have a lower amount of taxable income, you won't have to pay as many taxes. You aren't taxed on anything that is automatically moved from a paycheck to a 401(k). You can contribute to a traditional IRA or Roth IRA account. With traditional IRAs, it's possible that you can deduct your contributions, but the deduction amount depends on your retirement plan and income. You also have limits regarding the amount that can be stashed in an IRA. If you have children, you can create a 529 plan to save for their college tuition. This savings account doesn't include any federal income tax deductions, but some states will let you deduct the 529 income. If your health insurance plan has a high deductible, you can reduce your tax burden by opening a health savings account. Health savings accounts are tax-exempt and can only be used to pay for your medical expenses. Some employers offer HSAs, but you can also open one by yourself. You should also check to see whether you're eligible for certain deductions, one of the most effective being the Earned Income Tax Credit.

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Lou Mancusi (https://www.bebee.com/@lou-mancusi) Wealth Advisor • Noyes Wealth Management 54 min ago https://www.bebee.com/producer/@lou-mancusi/is-it-possible-to-reduce-your-taxes

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