December 31, 2017
You can save hundreds -- or even thousands -- of dollars by employing some of these tips. In the process, you may end up better prepared for retirement, too.
A major tax bill has been passed, and in the years ahead many Americans will be paying more than before, while many others will pay less. Folks in both camps will still want to minimize any sums they pay Uncle Sam, so here are some tax tips to help many taxpayers shrink their bills.
Note that many of these actions can be taken throughout the year, not just at the end of the year or come April. For best tax-minimizing results, think about and tend to your taxes all year long.
Tip No. 1: Learn about changes to the tax laws
Few people are eager to read up on taxes, but the new legislation ushers in so many changes that it's worth becoming familiar with many of them, in order to best plan. For example, many tax deductions are ending in 2018. These include:
- Personal exemptions. These allowed many taxpayers to shrink their taxable income by a hefty $4,050 per person in 2017. This is gone for the 2018 tax year, though an increase in the standard deduction will partially offset it.
- Moving expenses.
- Some job-related expenses (such as license and regulatory fees and unreimbursed continuing education).
- Parking and transit reimbursement. Companies have been allowed to subsidize worker transportation costs up to $255 per month per worker, with the sum deductible by the employer and not counted as income to the worker. With this deduction gone, the job benefit may disappear, too.
The tax brackets themselves have changed, for 2018, with new tax rates and new income levels qualifying for them.