Taxes can not only be time-consuming to complete, but they could also cost you a lot of money if you aren’t careful. If you are looking to save money on taxes in 2022 then you should try following the five tips outlined below. Depending on your situation some of these tips might be more useful than others, but overall, they will help you make the most of your money by paying the least amount legally possible on taxes.
- Retirement contributions – 401(K)
Retirement contributions are reduced from your taxable income. This means that if you max out your retirement account it’s the year you will be able to save money in the short run by paying fewer taxes and in the long run by having a better retirement fund.
- Contribute to an IRA account
If you have a traditional IRA account you are also able to make contributions that are deducted from your taxable income today. Roth IRA accounts don’t have that benefit which is something you will want to consider.
- Health Savings Account
A Health Savings Account (HSA) is another great account for you to contribute to if you want to deduct your contributions from your taxable income. This account can then be used to cover all necessary medical expenses for both you and your family.
- Deductions
There are many different expenses that you can claim as deductions. Knowing that your medical bills, student loan interest, home mortgage interest, and property taxes can all be deducted can help you save money on taxes.
- Use Tax Credits
The IRS has many different tax credits available depending on your situation. Going through that extensive list and finding everything you are eligible for could help you save a lot of money and claim higher returns.
