Tax Savings Strategies for Individuals

1. Maximize Retirement Contributions

o Traditional IRA: Deduct up to $7,000 ($8,000 if 50+).

o 401(k): Contribute up to $23,000 ($30,500 if 50+). [money.usnews.com]

2. Use Health Savings Accounts (HSAs)

Contributions are tax-deductible, grow tax-free, and can be withdrawn tax-free for medical expenses.

3. Claim All Available Credits

o Child Tax Credit

o Earned Income Tax Credit

o Education Credits (Lifetime Learning, American Opportunity)

4. Harvest Tax Losses

Sell underperforming investments to offset capital gains.

5. Charitable Contributions

Donate appreciated assets or use donor-advised funds for maximum deduction.

6. Bunch Deductions

Combine deductible expenses into one year to exceed the standard deduction threshold.

7. State and Local Tax (SALT) Planning

The SALT deduction cap has increased under the 2025 tax law changes.

[turbotax.intuit.com]

Tax Savings Strategies for Small Business Owners

1. Home Office Deduction

If you use part of your home exclusively for business, you may deduct expenses like rent, utilities, and internet. [uschamber.com]

2. Section 179 Deduction & Bonus Depreciation

Deduct up to $1,250,000 of qualifying equipment purchases. Bonus depreciation allows additional write-offs for new or used assets. [blog.cmp.cpa]

3. Health Insurance Deduction

Self-employed individuals can deduct premiums for themselves and their families.

[turbotax.intuit.com]

4. Retirement Contributions

Contributions to SEP IRAs, Solo 401(k)s, or SIMPLE IRAs reduce taxable income and grow tax-deferred. [money.usnews.com]

5. Entity Structuring

Consider switching to an S-Corp or LLC to reduce self-employment taxes and optimize income distribution. [forbes.com]

6. Track and Deduct Business Expenses

Including travel, meals (50%), software, marketing, and professional services