At the end of every year and when tax time rolls around, people look to tax saving tips to help minimize tax liability and maximize tax returns. If you're looking for tax saving tips, you've come to the right spot. Consider these tax saving tips to minimize your tax liability and keep more of your tax money in your pocket:
Itemize your deductions.
If you own a home, have any self-employed business income or have various other tax-deductable expenses, it makes sense to itemize your deductions instead of just claiming the standard deduction. In many cases, itemizing saves you more money than claiming a standard deduction. Be careful if you itemize, though; consult a tax professional to ensure you're claiming only deductions for which you qualify, or you could be in trouble if the IRS conducts an audit.
Make deductions to your retirement plan.
If you've got a qualifying retirement plan and you're not making maximum pre-tax contributions, step up your contributions before the end of the year to minimize tax liability. Every penny you contribute to qualifying retirement plans up to the annual minimum is a penny on which you don't have to pay taxes, so give that money to yourself.
Defer income.
If you're self-employed, consider deferring income until the new year to minimize tax liability. If you're working on a cash basis, you'll owe taxes on any earnings up to the end of the year; however, if you defer billing and income until the beginning of the new year, you'll owe those taxes in the new year, not the current tax year. However, if you think you might be in a higher tax bracket next year, don't defer income; claim it as soon as possible to pay less in taxes.
Make charitable contributions.
Donations to qualified charities are tax-deductable, so you can make charitable contributions before the end of the year to minimize your tax liability. Keep in mind that you must have proof of a contribution; preferably by a receipt from the charity; in the event that you're audited.
Pay bills this year, not next year.
Paying some qualifying bills this year instead of next year can help to reduce your tax liability. Mortgage interest is deductable, so if you make a payment in December for your mortgage due in January, you can claim the interest on this year's taxes. The same thing goes for real estate taxes due in the first of the year; by making a payment in December instead of the new year, you'll owe less in taxes.
Offset capital gains with losses.
While stock market losses don't seem like a pleasant prospect when you look at your portfolio, they can actually be helpful when it comes to minimizing tax liability. Portfolio losses can help offset capital gains for the year, so consider selling some of those losing investments to reduce your tax liability.
 | While we all need to pay our taxes, you shouldn't pay more than you actually owe. Understanding a few basic income tax tips can greatly lower your tax liability. You can claim a number of tax deductions in order to lower the actual amount of tax you pay. However, you should be aware of issues such as raises and the alternative minimum tax (AMT), which may alter your income tax analysis. |
 | When tax time rolls around, people tend to fall into two categories: people who want to file their income tax return immediately and be done, and people who want to put it off as long as possible |
 | Are you worried about penalties for late tax returns? For whatever reason, you've let the April 15th income tax deadline come and go. There are penalties for late returns, but, if you follow the appropriate steps, you can minimize the penalties and keep things in good order with the IRS. |
Nearly 75 percent of Americans receive a tax return each year, with each return averaging nearly $2,500. That's a nice windfall for most of us but that doesn't mean you should run out and spend it like it's burning a hole in your pocket. |
Use our checklist as a guide to help you gather necessary forms and receipts for preparing your income tax return. |
