If you haven’t already filed your taxes, here are 3 easy things that you can still do to lower your tax bill for 2016:
- Contribute to an IRA: You can contribute up to April 18th, and have the contributions count as a “2016 contribution.” This would lower your income taxes for 2016. If you are covered under an employer plan (like a 401(k) or 403(b)) your deduction may be limited based on your income. See here for the income limits.
- Contribute to an HSA. If you have a high deductible health plan (HDHP), then you can contribute to an HSA. Individuals can contribute $3,350. If you have family coverage you can save up to $6,750 in 2016 for your HSA. These contributions lower your adjusted gross income (which lowers your taxes).
- Count all your itemized deductions. You’ll get to claim the higher of either the standard deduction or your itemized deductions. Most high income earners will itemize their deductions as it can lead to greater tax savings. The most common deductions are state income taxes, real estate taxes, personal property taxes, mortgage interest, and gifts to charity. Ask your CPA or look on Schedule A for a full list of potential deductions.
Nobody likes to pay Uncle Sam, so make sure you do everything you can to lower your 2016 tax bill. Hopefully, these tips help you out!