how to reduce your tax liability
taxes can take a significant bite out of your take home pay but it s something everyone has to live with to fund the government programs we rely on however there are a few ways to reduce the amount of taxes you pay you might qualify for other deductions or credits deductions reduce your taxable income and credits reduce the amount of tax you owe some deductions you might be able to take are 5some credits are contributing to a retirement fund does more than help you save for and grow your retirement nest egg if carefully planned you can reduce your tax liability for years to come you can contribute a specific amount per year to your ira which is tax deferred you contribute to a roth ira after you ve paid taxes to lower your tax liability by contributing you ll only need to determine how much you plan to be taxed in retirement by projecting your income and withdrawals if you re in a higher tax bracket now than you will be in retirement a traditional ira can lower your total tax payments because if you re sure you ll be in a higher tax bracket after you retire and begin taking withdrawals a roth ira can lower your total tax payments because withdrawals are tax free 6