The following strategies help reduce tax responsibility:
Putting pre-tax income into approved retirement accounts including 401(k) and IRA decreases your taxable earnings.​
Take advantage of all tax benefits you qualify for especially with home interests, medical bills, and educational programs.​
Taxpayers should benefit from Earned Income Tax Credit and Child Tax Credit because these credits directly decrease tax responsibilities.​
Tax-loss harvesting lets you deduct investment losses from gains by trading stocks that lost their value this year.​
By donating to approved charity organizations you can earn tax savings because the donation amounts reduce the income subject to tax.
Read more: federal income tax definition