Benjamin Franklin once said that \u201cIn this world nothing can be said to be certain, except death and taxes.\u201d\u00a0 Although you can\u2019t completely avoid your tax obligation, there are things you can do to reduce the amount you owe each year.\u00a0 Here are some basic tax-saving strategies everyone needs to know.<\/p>\r\n\r\n\r\n\r\n
A tax refund<\/a> isn\u2019t free money from the government.\u00a0 It usually means that you paid too much in taxes during the year and now you\u2019re getting the excess back.\u00a0 Review your withholding<\/a> at the start of each year to ensure you have the appropriate amount withheld.\u00a0 If you received a large refund and would rather increase your take-home pay, adjust your withholdings to pay less taxes during the year.\u00a0 If you owed money, submit a new W-4<\/a> to your employer so more taxes are withheld from your pay.<\/p>\r\n\r\n\r\n\r\n Maxing out your 401k<\/a> can bring you closer to achieving your retirement goals while reducing your tax bill.\u00a0 When you contribute to a 401k, the money comes out of your paycheck before taxes are deducted.\u00a0 As a result, you\u2019ll have less taxable income and may pay less taxes when you file your return.\u00a0 The contribution limit for 2023 is $22,500.\u00a0 Those aged 50 or older can make catch-up contributions up to $7,500.\u00a0 Even if you can\u2019t afford to max out the account, at least contribute enough to receive your full employer match.\u00a0 It\u2019s free money so don\u2019t let it slip through your fingers.<\/p>\r\n\r\n\r\n\r\n If you and your spouse aren\u2019t covered by an employer retirement plan, consider opening a traditional IRA<\/a>.\u00a0 Your contributions may be tax deductible, and your earnings will grow tax-free until you start taking distributions.\u00a0 <\/strong>For 2023, the maximum limit is $6,500 ($7,500 if you\u2019re at least 50 years old).\u00a0<\/p>\r\n\r\n\r\n\r\n The IRS offers a bunch of tax credits and deductions which can save you hundreds or thousands of dollars, but many taxpayers fail to claim them.\u00a0 One out of five eligible workers miss the Earned Income Tax Credit<\/a> annually.\u00a0 It is worth up to $6,935 for a family with three or more kids.\u00a0 Another tax break that\u2019s valuable for families is the Child Tax Credit.\u00a0 For tax year 2022, it is worth up to $2,000 for each qualifying child.\u00a0 Ensure you get all the money-saving credits and deductions you deserve by doing your taxes with ezTaxReturn.com<\/a>.\u00a0 It\u2019s fast, ez and you\u2019ll get the biggest possible refund, guaranteed.<\/p>\r\n\r\n\r\n\r\n A 529 plan is a tax-advantaged account designed to help families pay for K-12 private school tuition or higher education expenses (college, trade school or vocational school).\u00a0 You don\u2019t pay any income taxes on your earnings and your withdrawals are tax-free when used for qualified education expenses.\u00a0 Another major perk is that most states allow you to deduct your 529 plan contributions when you file your state income taxes.<\/p>\r\n\r\n\r\n\r\n A flexible spending account (FSA)<\/a> is an employee benefit that lets you set aside money for medical expenses.\u00a0 For 2023, the contribution limit is $3,050.\u00a0 The money is deducted from your paycheck before taxes, so you won\u2019t pay any income taxes on your contributions.\u00a0 The downside is that if you leave your job, you can\u2019t take the money with you.\u00a0 Plus, you must use the full amount by December 31st<\/sup>, or you lose your FSA dollars.\u00a0 Some employers allow you to carry over an unused portion, but you\u2019re limited to $610.<\/p>\r\n\r\n\r\n\r\n If you\u2019re enrolled in a high-deductible health plan, you may qualify for an HSA<\/a>.\u00a0 An HSA is a savings account that lets you set aside pre-tax dollars to pay for qualified medical expenses.\u00a0 Contributing to an HSA has three tax benefits.\u00a0 Your earnings grow tax-free, your withdrawals are tax-free if the money is used for eligible expenses, and your contributions lower your taxable income, so you pay less in taxes.\u00a0 The 2023 maximum contribution limit is $3,850 for individual coverage and $7,750 for family coverage.\u00a0 You contribute even more once you turn 55 years old.\u00a0 The contribution limit is $4,850 for individual coverage and $8,750 for family coverage.<\/p>\r\n\r\n\r\n\r\nMax out your 401k<\/strong><\/h2>\r\n\r\n\r\n\r\n
Contribute to an Individual Retirement Account (IRA)<\/strong><\/h2>\r\n\r\n\r\n\r\n
Claim all the money-saving tax credits and deductions you can<\/strong><\/h2>\r\n\r\n\r\n\r\n
Save money in a 529 plan<\/strong><\/h2>\r\n\r\n\r\n\r\n
Fund a Flexible Spending Account (FSA<\/strong>)<\/h2>\r\n\r\n\r\n\r\n
Contribute to a Health Savings Account (HSA)<\/strong><\/h2>\r\n\r\n\r\n\r\n