10 Ways to Lower Your Taxes

1. Boost your 401(k) contributions.
2. Make the most of your flexible spending account.
3. Buy a house.
4. Buy a car.
5. Sell losing investments.
6. Maximize your tax credits and deductions.
7. Pay college bills.
8. Give to a charity.
9. Max out tax breaks for the self-employed.
10. Keep track of medical expenses.
1. I've been maxing out my 401k for years, so I get the full tax advantages here.
2. Does a HSA count? If so, I put in the maximum allowed each year.
3. I already have a house and it's been paid off for over a decade -- so I don't get the new homeowner credit or the mortgage interest deduction. And I'm ok with that.
4. I thought about buying a car this year and saving the state taxes, but I think my car will last another (hard) winter and it's probably a better deal to keep it longer. So I'll look for a new car in 2010.
5. I have enough investment losses to carry over for years. Ugh.
6. We're looking at buying a new heater/AC and the $1,500 tax credit is one reason why. That and the fact that the repairman said, "Your heater is making a funny noise. My suggestion is to never turn it on again."
7. Our 529 contributions save us on state taxes (a few hundred dollars a year) because we invest with an in-state 529 plan.
8. Our biggest deduction for the past several years.
9. If you have a business (or a side business), you can save a bundle on taxes by having the business cover many costs (such as a deduction for home office use, magazine subscription, books, computer equipment and support, etc.) I could make much better use of this option, but I seem to maximize revenue and minimize expenses (which is not a bad thing.)
10. I'd prefer to have no medical expenses at all than to have massive ones that save me on taxes (which is probably the same way everyone feels about this issue.) But if you do have big medical bills, it's at least some consolation that they can save you some on your taxes.