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what are some of the ways I can save money on my federal income taxes?
1. Saving for Retirement – We all know we need to save for retirement, but not everyone is aware that saving for retirement is also a great way to save on taxes right now. [ Federal income tax law does, however, have limitations on the amount you can contribute tax free each year. Adopting a Child – According to federal tax law, you qualify for a tax credit in the year that you incur qualifying expenses related to adopting a child. This however is not deductions but credits. Try reading more and it’s important to research the details of how this credit works Get a mortgage – Owning your
own home is one of the biggest tax savings opportunities. The interest you pay on your mortgage is tax deductible, and in the first few years of a mortgage, most of your house payments go to interest, so you can save a bundle. Paying for Education – According to federal tax law, the tuition that you pay for your college expenses or for the college expenses of your dependent qualify for a tax deduction. There are two types of education deductions; once called the Hope credit and one called the Lifetime Learning credit. Go green – According to federal income tax law, many of your energy efficient purchases come with tax deductions. When you purchase home products, like replacement windows or a hot water heater, be sure they come with the government’s energy star rating. Items with the energy star rating are subject to tax deductions of about 10% of the purchase price in most cases. Contribute to Charity – Charitable donations are tax deductible. And the federal income tax laws regarding charitable donations don’t just apply to cash donations, either. When you donate items like clothing and household items to charities that accept them, you can donate the value of the items donated. source: ]
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Expert answered|sharpies|Points 7541|
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Asked 5/5/2012 4:15:06 PM
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