Q:

How can you reduce the taxes you pay?

A:

Quick Answer

Ways an individual can reduce his taxes include funding a health savings account, making contributions to a retirement account, home office deductions for the self-employed and making charitable donations, according to U.S. News & World Report.

Continue Reading
How can you reduce the taxes you pay?
Credit: Tax Credits CC-BY 2.0

Full Answer

An individual with a high-deductible medical plan can contribute to a health savings account in order to reduce the amount of taxes he pays, notes U.S. News. Any financial contributions that go unused roll over tax-free.

Retirement accounts are one of the most widely used methods of reducing tax payments, says U.S. News. Any deposits made to a retirement account can be subtracted from taxable income. Retirement account contributions continue to be tax free until the account holder retires.

A self-employed individual can claim home office deductions to lower tax payments, according to U.S. News. Any percentage of the home that is used only for business can be deducted for utility and rent fees. If the space is used for both business and personal use, it no longer qualifies as a deduction.

Making charitable donations is also a viable option for reducing taxes, says U.S. News. Contributions can be made with cash, check, payroll deductions, clothes and goods. Church tithes can also be considered as charitable donations.

Learn more about Taxes
Sources:

Related Questions

Explore