Originally Posted by andy123
Our joint income is around $160,000 for 2013-2014. We have not put any money so far in any tax saving option. Please
suggest ways to lower taxes before the april deadline for this year and also for the upcoming year.
your agi and taxable income’d be lowered if you increase your deductions,above the line/below the line deductions; what I mean is you need to reduce agi and ti thru some prudent, relatively low-risk ways.first, you need to make maximum retirement contributions,i.e. ira, not roth ira or etc; Don't touch your IRA until you retire.if yu have child/ren/, then, you may take the credit for child and dependent care expenses. This credit reduces AGI by subtracting at least a portion of the money you spent on items such as daycare, after-school care and nursing home care for a dependent parent. You must fill out Form 2441 to claim this credit;also, you need to make sure to account for any education credits to which you are entitled, such as the aoc and Lifetime Learning credits. For taxpayers who fall below a certain income level, there is a sliding scale as to how much education expenses can be deducted from AGI. You may also complete Form 5695 to qualify for residential energy credits. Home improvements such as new doors, windows, roofs, solar energy panels and propane tanks can save taxpayers big bucks at tax time.you may
account for any children you have by taking the child tax credit. Fill out Form 8901 to determine the extent of your credit for qualifying children who are not dependents. Many taxpayers can take credits of up to $1k per child depending on a variety of factors;
note;. Tax deductions reduce your taxable income. Less income means a smaller tax bill. What's the best way to reach the smallest possible taxable income level depends on your personal circumstances. One of many questions that may arise at tax time is whether or not to use standard or itemized deductions. Itemized deductions on a tax return look into the actions that you've taken over the past year. Common deductions that are itemized on a tax return include medical costs, state or local income taxes, real estate taxes, donations to charities, mortgage interest payments and business expenses that weren't reimbursed. This total may or may not end up being more than a standard deduction. When deciding which type of deduction to take, you should choose the one that saves you the most money. The only reason to take the time to calculate itemized deductions is if it's clear that the sum will be larger than the standard deduction you would qualify for.