If you’re looking to reduce the amount you pay in taxes (or increase your yearly refund), this article may have some tax planning strategies for you. Your tax bill might be one of the largest expenses in your retirement. And if your employer withholds your taxes from your paycheck, you may not truly get a sense of how much you’re spending on taxes.
Keep in mind that for the itemized deduction strategies presented in this article to be worth it for you, your savings from applicable strategies will have to exceed the standard deduction.[1] The standard deduction for 2024 is $14,600 for those filing single and $29,200 for married couples. Remember, this doesn’t mean you get that much back in taxes; it means that that amount is not subject to your income tax rate. In most cases, you can use the standard deduction to reduce your taxable income for the year.[2] So, if you are single and you made $50,000 in 2024, you could reduce that amount by $14,600 and put yourself in a lower tax bracket![3] But if you want to use the following strategies, you must be able to exceed the standard deduction amounts.
So, what itemized deductions are out there that can help you reduce your tax burden?
- Mortgage interest: You can reduce your yearly income by some of the interest you’ve paid on your mortgage debt this year. The amount you can itemize depends on when you purchased your home and the value of your home.[1]
- Home Office Expenses: A deductible expense for self-employed homeowners is an expense for a home office. If you use a portion of your home exclusively as your place of business on a regular basis, expenses for and to upkeep that office can be deducted. However, employees who work from home cannot claim a home office deduction.[1]
- Property taxes: You can deduct up to $10,000 (or $5,000 if filing single) in paid property taxes.[1]
Our last suggestion for tax planning: Consider the tax planning services of a financial professional. A financial professional can help you to understand your entire financial picture and give you personalized advice on how to manage your taxes. If you are looking for help with property tax filing, federal tax filing, or any other tax filing help, consider reaching out to one of our professionals today for an assessment of your financial situation.
[1] https://www.nerdwallet.com/article/mortgages/tax-deductions-for-homeowners
[2] https://www.nerdwallet.com/article/taxes/standard-deduction
[3] https://www.nerdwallet.com/article/taxes/federal-income-tax-brackets
This information is provided as general information and is not intended to be specific financial guidance. Before you make any decisions regarding your personal financial situation, you should consult a financial or tax professional to discuss your individual circumstances and objectives. The sources used to prepare this material are believed to be true, accurate and reliable, but are not guaranteed.
