Minimize taxable income
The goal when filing taxes is to reduce taxable income as much as possible, allowing you to claim as much of your hard-earned money as you can for yourself.
There are multiple ways of accomplishing this, and all of them require pre-planning and attention to detail. Consider if any of the following options apply to you.
Making full use of your 401K plan is one of the most common ways of saving on your taxes while also building savings for later in life.
You can contribute up to $15,000 each year, which is untaxed and usually matched to some degree by your employer. You won’t have access to the funds until after retirement, but the additional perks make it well worth it.
Each year you have the option of deferring taxable income until the following year.
While it may just sound like a good way to procrastinate, it actually comes with a few hidden benefits for the smart tax filer. If your income from stocks was significant, this will allow you to defer capital gains tax.