5 ways to save on taxes (and score future savings)
You know the saying about death and taxes. The good news? We have far more control over the latter. With breaks for those who contribute to retirement and other qualified accounts, maximize deductions, and engage in charitable giving, options abound for saving money when paying The Man.
In fact, our pals at tax preparation site TaxSlayer are here to help you save big when you file this year. You'll save up to 80% when you choose TaxSlayer compared to the other guys – plus, we have an exclusive code for 35% off your federal return below!
Keep reading for five ways to save on your taxes and what to do with that refund to help pocket even more hard-earned cash next year.
How to save: pay less for tax filing
Most people forget to account for one crucial yearly expense when filing their taxes: the costs associated with completing the filing itself. For those not up to date on tax rules and regulations, paying a CPA can siphon hundreds or thousands of dollars from your bottom line. There could be a more affordable way to file: With tax filing software, taxpayers are guided through the complicated process and shown how to maximize tax breaks for a far more affordable fee.
The smart spend: Fancy tax filing software suites are commonly priced to match their robust offerings, making many pay for features they never use. But TaxSlayer’s pricing model charges for the amount of support you need — and nothing more. That means a filer can pay as little as $29.95 (or even free for some), depending on the features used, like one-on-one tax pro support, filing guidance for the self-employed, and more. No matter how much or little you spend on the service, it’s all delivered via an elegant interface (that frankly, belongs on a more expensive suite of tax tools). Better yet, readers can score 35% off federal tax return filings with code HONEY35 through April 18, 2022.
SHOP: Classic, $29.95, available at TaxSlayer
How to save: Think retirement, early and often
Your golden years may feel like a lifetime away, but the truth is, it’s never too early to pad your later-in-life accounts. Contributing amounts up to $6,000 (if under the age of 50) to a traditional IRA or up to $19,500 (for those under 50) to a 401(k) is a way of stashing for the future, without paying tax on that income now.
The smart spend: If saving $6K or more for an IRA or 401(k) sounds impossible, try a lifestyle adjustment to help get you there next year. One way to do it: reduce drive times (and that painful payment at the pump) by investing in an electronic bike to complete neighborhood errands — or even your commute to work. This model, powered by an included battery made to last 20 mile rides, provides that extra oomph for when your body fatigues. Achieve top speeds of 20 mph in electric mode (or 28 mph with assisted pedaling) on hybrid tires made to traverse urban and suburban terrains. Better yet, the company offers a year-long money back guarantee.
SHOP: Reach Your Destination 500W Electric Bike, $1,999.99, available at SixThreeZero
How to save: give to others
Some say there’s little reward for kindness in the world, but Uncle Sam says otherwise. Charitable contributions of up to $300 to nonprofit organizations may mean a deduction of the same amount on your 2021 tax forms. That means cash given to humanitarian efforts in Ukraine, helping endangered wildlife groups, or even donated household items, vehicles, clothes, and more could reduce the amount of tax owed — just make sure you have a receipt to claim the deduction.
The smart spend: Looking to maximize your household giving next tax year? Consider a little change to your daily routine that saves a few dollars a day. One way to do it: make your own morning cup of Joe. Though taking the DIY route doesn’t mean you can’t have the same barista-quality drinks you’ve become accustomed to, you may need to stock a few key ingredients to replicate your favorite drink. Enter this new oat milk (from a carbon-neutral company), which foams like a dream, even though it’s made with less fat than conventional oat milks.
SHOP: Minor Figures Barista Oat Milk (Light) 6 Pack, $24, available at Minor Figures
How to save: tax-free health care
Flex Spending Accounts (or FSAs) are bank accounts that can be set up to pay for out-of-pocket health care costs. By dedicating a portion of your paycheck (up to $2,750 in tax year 2021) to feed an FSA account, you can sidestep the taxes usually associated with that income. Of course, rules apply (including how you can spend the money), but setting up such an account is a smart way to cover some health expenses you might already have, like over-the-counter medicines with a doctor’s prescription.
The smart spend: While dedicating tax-free funds to your health, why not renew your commitment to a healthy lifestyle by investing in a solid pair of workout shoes? This pair, made for cross-training and high-intensity workouts, is also fashioned with a narrower heel, generous toe and with soft foot cushioning to better meld a woman’s foot and with extra arch in the insole and pivot points on the outsole to support quick movement.
SHOP: Vivid RZX Training Shoe, $89.99, available at Ryka
How to save: claim what’s yours
Earned Income Tax Credits can climb to nearly $7,000 depending on how much money you made last year, whether you have a spouse or kids, and other factors, so it’s worth looking into whether you can claim this credit on your filing. If you do, the amount claimed is erased from your tax bill (rather than being used as a deduction).
The smart spend: A piece of heirloom gold jewelry can always be swapped for cash if needed. Plus, it’ll last from generation to generation, increasing in sentimental value. Made from sustainable materials (hello, recycled gold) and sourced from material providers using fair labor practices, this herringbone chain adds timeless shine to any look.
SHOP: Carter Flat Herringbone Chain II, $580, available at Kinn Studio