How To Lower Your Taxable Income

There are a number of ways that you can lower your taxable income. Some of the most common methods include:

1. Increase Your Deductions

One of the easiest ways to lower your taxable income is to increase your deductions. This includes things like contributing to a 401(k) or IRA, paying interest on your mortgage, and charitable donations.

2. Adjust Your Withholding

If you’re having too much money withheld from your paycheck, you may be able to adjust your withholding to have less money taken out. This will increase your take-home pay, but you may owe taxes at the end of the year.

3. Invest in Municipal Bonds

Municipal bonds are bonds issued by state or local governments. The interest you earn on these bonds is exempt from federal taxes, and in some cases, state and local taxes as well.

4. Sell Losing Investments

If you have investments that have lost money, you can sell them and use the losses to offset any gains you have elsewhere. This can help to lower your overall tax bill.

5. Defer Income

If you have the option, you may be able to defer income into the following year. This can help to lower your taxable income in the current year.

These are just a few of the ways that you can lower your taxable income. If you are experiencing significant debt or financial troubles due to taxes, talk with a Dallas bankruptcy lawyer  to see what other options may be available to you.