If you want to lower your taxes, it’s important to have more than a vague understanding of how our tax code works, what tax bracket you expect to be in, and what sort of activities are incentivized by the IRS.
While certain moves can be made up until Tax Day, many effective tax mitigation strategies must be employed before Auld Lang Syne is sung as the calendar turns to January 1st.
Throughout the year, opportunities exist if you know how to look for them. A lot can be done to lower taxes. Here, I’ll share more than ten ways you can lower your taxes.
Do you have stocks, mutual funds, or ETFs with losses?You can lower your taxes by selling the losers, and ideally replacing them with something similar but not identical.
It’s a clever strategy, and if done right, can save most taxpayers a minimum of $1,000 to $1,500 a year, and potentially tens of thousands of dollars in capital gains taxes.
A tax-advantaged account is any account that doesn’t tax earnings. Your IRA, 401(k), 403(b), 457(b), HAS, etc… Roth accounts have the added bonus of tax-free withdrawals.
This one is complex and is best accomplished with the use of a trust or trusts. It’s a sneaky (and potentially risky) way of increasing the cost basis of highly-appreciated investments.
Captive Insurance is a way for a business to self-insure in a tax-effective manner. It’s also an area that seems to straddle the line between tax avoidance and tax evasion, depending on how it’s set up.