How can you reduce your taxes? Joe Anderson, CFP® answers this question in 60 seconds.
Transcription:
“How can I reduce my taxes? Number one: contribute to a qualified plan, a 401(k), 403(b) or TSP plan. If you do not have an employer-sponsored plan, you can contribute to an individual retirement account; that would also reduce your taxes if you qualify. Maybe check for a Section 125 plan if you’re employed, that would reduce your taxable income as well. It’s a use it or lose it situation so you’ve got to be careful; that’s for medical benefits. You want to take a look at if you’re charitably inclined. If you want to give a little more to charity then that would save you money in taxes. Asset location: how you position your assets in different areas would also potentially reduce your taxes. You have capital gains tax versus ordinary income tax versus tax-free. You want to make sure you coordinate as much as you can. How about tax-loss harvesting? That would reduce your taxes as well. When assets go down you can sell them, buy something similar and take that loss. That’s how you can reduce your taxes”
Aired: 3/27/16
