If the idea of taxes makes you break out in cold sweats like a vampire in a church pew, don’t worry! The Wall Street Journal explains three (legal) tricks taxpayers can use before the year ends to make Uncle Sam take less of your hard-earned cash, leaving it in your very own pocket where it belongs.
Here are Five Fast Facts on reducing your 2025 taxes:
- 🐖 Retire It - Stuff more cash into your retirement piggy banks! If you bump up contributions to big accounts like a 401(k) by Dec. 31, you lower your taxable income. It's kind of like hiding a brownie in your brussels sprouts.
- ⛪ Help Out - Donating to charity is tax magic. If you give to a qualified charity before the end of the year, you can subtract some of that money from what you owe the IRS. It's doing good AND avoiding the Tax Man!
- 🙈 Loss Is More - While it sucks to take a loss on big sales or investments, there's a silver lining - you can report those losses to reduce your tax burden! Make sure you work with your financial advisor to do it correctly, but it could help prevent being needlessly taxed on the loss, which is just adding tax insult to financial injury.
- 👀 Hard Deadline - It all ends on December 31, obviously. If you wait until January, your moves won’t count for this tax year, so don’t procrastinate like you do on homework!
- ♻️ Start Early - Hopefully you can get the benefit of these tips for 2025, but remember them for next year, too! There may be some changes in the new year, but generally speaking these things will be available to help in future years, as well. So rinse and repeat starting in January, and get ahead of the curve for next year!
🔥Bottom line: The year is almost over, and the IRS doesn’t care if you have holiday plans. By stuffing your retirement accounts, giving to charity, and acting before Dec. 31, you can shrink your tax bill like a wool sweater in a hot dryer. Make a plan, do your thing, and keep that cash away from the greedy Tax Monster!
Got any other great year end tax tips?
Let us know by connecting with us on Facebook and Instagram! Also, remember to share this newsletter with your friends & coworkers!
BTW, If you’ve read this far and haven’t yet signed up for the weekly Paycheckology newsletter, CLICK HERE!
