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5 Tax-Saving Strategies to Keep More of Your Money

Garrett Hall |
Categories
Tax Planning
Retirement

Tax season doesn’t have to be stressful. With the right planning, you can minimize your tax liability, avoid surprises, and keep more of your wealth working for you. Whether you file taxes on your own or work with a professional, understanding these key strategies can help you stay ahead and avoid costly mistakes.

1. Adjust Your Withholding to Avoid Surprises

A large tax refund may feel like a win, but it really means you’ve been giving the government an interest-free loan all year. On the other hand, underpaying could leave you with an unexpected tax bill come April.

How to Stay on Track:

✔ Review your W-4 regularly, especially after major life changes like marriage, divorce, or a new job.
✔ Use the IRS Tax Withholding Estimator to ensure you’re on target.
✔ Consult a tax professional to fine-tune your withholding strategy.

2. Make Estimated Tax Payments If Required

If you’re self-employed, a business owner, or have significant investment income, you likely need to make estimated tax payments. Missing these payments can result in penalties.

Estimated Tax Payment Deadlines:

📅 April 15 – For income earned January 1–March 31
📅 June 15 – For income earned April 1–May 31
📅 September 15 – For income earned June 1–August 31
📅 January 15 – For income earned September 1–December 31

How to Stay on Track:

✔ Use IRS Form 1040-ES to calculate and submit estimated payments.
✔ Set aside a portion of your income regularly to avoid financial strain.
✔ Automate payments through IRS Direct Pay or the Electronic Federal Tax Payment System (EFTPS) to avoid missed deadlines.

3. Maximize Tax-Advantaged Accounts

Certain accounts allow you to reduce taxable income while growing your wealth for the future.

Key Accounts for Tax Savings:

✅ 401(k) – Contributions reduce taxable income (plus, employer matches = free money).
✅ Traditional or Roth IRA – Traditional IRAs may provide tax deductions, while Roth IRAs offer tax-free growth.
✅ Health Savings Account (HSA) – Contributions are tax-deductible, grow tax-free, and can be withdrawn tax-free for medical expenses.
✅ Flexible Spending Account (FSA) – Similar to an HSA, but must be used within the plan year.

💡 Pro Tip: Automate your contributions to stay consistent.

4. Claim Every Tax Deduction & Credit Available

Deductions lower your taxable income, while credits reduce your tax bill dollar-for-dollar. Don’t leave money on the table!

Common Tax Benefits to Consider:

✔ Saver’s Credit – A tax credit for qualifying retirement contributions.
✔ Student Loan Interest Deduction – Allows eligible taxpayers to deduct up to $2,500 in interest paid.
✔ Energy-Efficient Home Credit – Tax savings for qualified eco-friendly home improvements.
✔ Self-Employment Deductions – Includes home office, internet, phone, and travel expenses.
✔ Charitable Contributions – Some donations may be deductible, even if you don’t itemize.

How to Stay on Track:

✔ Keep detailed records of expenses and receipts throughout the year.
✔ Review IRS guidelines or consult a tax professional to confirm eligibility for deductions and credits.

5. File on Time to Avoid Penalties

The IRS imposes penalties for late filings and unpaid taxes—potentially up to 5% per month on unpaid taxes, up to 25% of the total owed.

How to Stay on Track:

✔ Mark tax deadlines in your calendar and set reminders for April 15th.
✔ If needed, request an extension using IRS Form 4868.
✔ If you owe taxes but can’t pay in full, set up an IRS payment plan instead of ignoring the issue.

Bonus Tip: Adjust for Life Changes

Major life events can impact your tax situation, so it’s important to stay proactive.

How to Stay on Track:

✔ Update your W-4 with your employer after big life changes.
✔ Check eligibility for new deductions or credits, such as the Child Tax Credit or Mortgage Interest Deduction.
✔ When in doubt, consult a tax professional to ensure your tax strategy aligns with your evolving financial picture.

The Bottom Line

Smart tax planning isn’t just about April 15th—it’s about making intentional moves throughout the year. By adjusting your withholding, making estimated payments, leveraging tax-advantaged accounts, and maximizing deductions, you can better manage your tax liability and keep more of your wealth where it belongs.

While these strategies can help reduce your tax burden, every situation is unique. If you’d like personalized tax planning guidance, we’re here to help. Let’s make sure your tax strategy supports your long-term financial goals.

Sources:

  1. IRS, 2025 [URL: https://www.irs.gov/individuals/tax-withholding-estimator]
  2. IRS, 2025 [URL: https://www.irs.gov/faqs/estimated-tax/individuals/individuals-2]
  3. IRS, 2025 [URL: https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes#:~:text=How to pay estimated taxes]
  4. IRS, 2025 [URL: https://www.irs.gov/taxtopics/tc456]
  5. IRS, 2025 [URL: https://www.irs.gov/payments/failure-to-pay-penalty]

This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2025 Advisor Websites.