Tax season is here. And that means looking for ways to save on taxes and ways to make tax time work for you. Here are our best tips.
Contribute to an IRA. If you don't already have one, now's the time to open a Traditional or Roth IRA. Both give you tax advantages, with a Roth giving you the ability to earn tax-free and the Traditional IRA providing you with tax-deductible contributions. Both are a great way to save for your future. For the 2020 tax year, you can contribute up to $6,000, and those age 50 and older can contribute up to $7,000. Learn more about IRA tax savings at irs.gov.
Don’t go it alone. These days, there are a lot of ways you can get help with taxes, so there's no need to slog your way through stacks of complicated tax forms. Filing your taxes with the help of a professional tax service, accountant, or even do-it-yourself software makes the process of filing taxes easier – but also helps you find more ways to save. Some programs, like TurboTax, even guarantee the accuracy of their returns and are very affordable, saving you lots of time before the tax deadline rolls around.
Put your refund to work. If you get a refund (yay!), resist the urge to spend it all in one place. Instead, put it to work for you and your future. Build an emergency savings fund. Pay down high-interest debt. Put it toward your IRA for 2021. There are so many ways to make that money work hard for you.