Everyone wants to save money on their taxes each year, not lose money. The great news is that it is possible to reduce your taxes owed while also enjoying other benefits from the reduction. These strategies will not only be good for your wallet, they may also benefit the environment and non-profit organizations as well!
Save More for Retirement
A great way to reduce your taxes is to make sure you are contributing as much as you can to your retirement savings before the end of the year. If you have a Roth IRA, try and max out your $6,000 contribution to see tax savings. Another action you can take, recommended by Tax Act, is to increase your 401(k) withholding. If you are over the age of 50, you can make catch up contributions to both 401(k)s and Roth IRAs. Some employers will offer a match for 401(k) contributions, so contributing the most you can will help you take full advantage of this.
Take Advantage of Green Energy Credits
If you want to save on your energy bill, save on your taxes, and help the environment, consider ways to earn Green Energy Credits, or Renewable Energy Certificates (RECs). Renewable energy tax credits provide a credit to you on your taxes for using renewable energy whether its solar, wind, fuel cells, or geothermal. According to Suntuity Solar, the federal solar tax credit returns 26% of the cost of your system. Tax credits may cover the installation of these renewable energy systems as well. Using renewable energy can save you money on your energy bills in the long run, while helping the environment and providing a credit on your taxes.
Last Minute Deductions
A final way you can reduce your taxes by the end of year is by making some last minute deductions. Charity Navigator points out that contributing to charity is an easy and fulfilling way to make deductions. You may be eligible to deduct as much as $300 in qualified, charitable contributions. Qualified organizations under the tax code include churches and religious institutions, veterans’ organizations, volunteer fire companies, and other 501(c)(3)s.
There are so many ways to reduce your taxes before the end of the year that can not only benefit you, but the environment and charitable organizations as well. Planning ahead and keeping good records of possible deductions will help make doing your taxes the following year a little less stressful.
Read this next: Potential Sources of Income Lying Around Your House