20 money-saving tips for filing your tax return: tax tips, deductions, and more

Having Office Deductions

For self-employed or individuals working from home, they are eligible for home office deductions. This provides you with an option to subtract a portion of rent, utilities, and other expenses, which can help reduce your tax.

Assessing the Taxable and Non-Taxable Wages

It is important to assess your wages and income. Even those with freelance activities and side hustles should be assessed for taxable and non-taxable earnings. But, it is also important to note that you must be informed about what counts as taxed income and what doesn’t in your tax situation. For instance, people with inheritances aren’t eligible to pay taxes on inherited stuff. However, it must still be reported if it exceeds a certain limit.

Using IRS Form 8889 for reporting HSA distributions

For those having a health savings account (HSA) or a Flexible Spending Account (FSA), you can gain benefits from contributions. Contributions to these two accounts are considered tax deductions that minimize your taxed wages. Furthermore, the eligible medical expenses that are paid with these contributions are also tax-free. For the tax year 2025, the contributions can be up to $3850 to a Health savings account if you are an individual and $7750 for families.

Assert Deductions for Charity Deductions

For charitable donations, both cash and property, you might be qualified for tax deductions. You need to keep receipts and a track data of donations. This includes the date, amount, and recipient of charitable donations for your federal tax return. The charity contributions can pile up a lot over the course of time and save you a lot of funds on your tax returns.

Avoiding Silly Blunders

A common way to save some bucks on taxes is to not make any silly mistakes that can lead to potential penalties. These are mistakes like entering an incorrect social security number, failing to report the income, and incorrect bank information that can affect your federal tax refund.

Keeping a track record of business costs for self-employed individuals

For self-employed individuals, a managed track record of business costs annually is important. In this way, you can subtract a lot of business expenses like office resources, travel expenses, and professional services to reduce your tax burden. Therefore, having these expenses managed and reporting them precisely can allow you to reduce the tax income.

Failing to observe the saver’s credit

For those who made better additions to a retirement account and have qualified for certain income levels, you might have satisfied the criteria for the savings credit, potentially affecting your federal tax return. This is a non-refundable tax credit which is beneficial for people in low-moderate income brackets. In this way, you can save for retirement an amount up to $1000, which is double for married couples, potentially affecting your tax bracket.

Tax loss gathers in for investments.

For those who have sold investments that provided a loss, you can utilize those losses to increase your gains, thus minimizing your taxed income. This phenomenon is called tax-loss harvesting, and it facilitates you to reduce your capital gain taxes by selling investments at a lower rate. Make sure to consult with a financial consultant or tax professional to make sure they are in compliance with the designated rules and enhancing their savings.

Avoid Late payment

Make sure to file your tax return before the due date. For those who owe smaller taxes and have missed the due date, you can be fined by the IRS for late fees and penalties. The Internal Revenue Service provides payment plans for people who are not able to afford payment so that they can easily avoid interest charges and penalties.

Free Filing

For people with individual income tax below a certain level, the Internal Revenue Service has a free income tax filing service. This provides you the option to pay online taxes and state and local taxes using accounting software for filing federal taxes at no charge at all and having tax savings.

Filing your own taxes

Hiring a professional tax consultant from a tax preparer for tax advice, tax due, tax time, state income tax, business tax returns, and state tax might not be beneficial for all tax situations. This is because a tax consultant charges hefty rates, which everyone can’t afford; for people who need to file basic tax returns, manually filing their own taxes using tax software might be a better way to save a lot of bucks. The key thing here is the knowledge of U.S. taxation and how to file any additional taxes and your business tax as well.