5 Ways to Save on Your Taxes

The April 15th deadline for filing your taxes is quickly approaching! Check out some of these ways to save when filing both now and in the future:

1. File on your own. There are so many online services, such as TaxACT, that now offer step-by-step instructions to help you file your taxes on your own for little or no money. Why pay someone else to do something you’re perfectly capable of doing yourself?

2. Deductions. Some of the most common deductions that people claim are charitable donations, mortgage interest, home office needs, student loan interest, child care, and certain medical and dental expenses. It’s worth checking to see if itemizing your taxes is worth your while.

3. Consider a flexible spending account. When signing up for your benefits at work, consider whether signing up for a flexible spending account could be beneficial to you. Under a flexible account program, funds are taken from your paycheck on a pre-tax basis, which would reduce your taxable income, and are refunded to you when you submit the appropriate claim forms to your benefits department. FSAs are generally used for health care and dependent care.

4. Tax credits. You can often get tax credits for things such as energy-efficient home improvements or installing alternative energy equipment (go green to save green!). You can also get a credit for having a child. Do a little research to see what’s out there that could apply to you, and check for limits or restrictions to make sure you qualify.

5. Contribute to a retirement fund. Adding to your retirement savings lowers your taxable take-home paycheck, and contributions to a 401k or an IRA are tax deductible. You can also consider shifting some of your funds to a Roth 401k if your employer offers it. While you won’t get a tax break for this now, your money will come out tax-free when it’s time to withdraw for retirement.