Simple Ways You Can Reduce Your Tax Bill

Getting the maximum refund possible is the goal for most, if not all, taxpayers. Are you doing everything to get your maximum refund?

Last year, the IRS received over 16 million tax returns. The average refund was about $2,306. Getting a refund like that is nothing to sneeze at; however, that doesn't mean we can't do better.

An abundance of ways exists to reduce your tax burden and get the maximum refund without breaking the law.

Maximize Charitable Donations

This tax-free transfer of cash or stock is permitted as long as the distribution (maximum $100,000 annually) is paid directly out of the IRA by the custodian.

This kind of tax break can be beneficial for taxpayers forced to take their Required Minimum Distributions (RMD) starting at age 72.

Another charitable option, for taxpayers of any age, is to directly gift appreciated stock you have held for a year or longer to a charity from a taxable brokerage account.

Accelerate Retirement Savings

Contributing to a retirement account is a great way to simultaneously save for the future and lower your tax bill.

If you weren't eligible for an employer-sponsored retirement plan in 2021 but earned wages, you can make a traditional IRA contribution on or before the tax deadline and have it count as a 2021 tax deduction.

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