With only a few months left in 2021, it's time to gather all the secret savings tips that can score you a home run on your tax return. The last thing you want is to ring in the new year with a surprise tax liability.  

Since time is ticking, here are three quick tax benefits you can look into before the year closes. 

Excited person looking at computer screen with two hands up.

Image source: Getty Images.

1. Take advantage of workplace benefits  

If you're looking for instant tax savings this year, your employer-sponsored retirement plan could do the trick.

First, check with your employer to determine what type of retirement plan is currently offered. You may hear the terms 401(k), 403(b), or Thrift Savings Plan because those are common options. These accounts allow you to set aside money from your paycheck to invest in assets that can boost your retirement portfolio over time. 

But there are also benefits you can tap into now. For example, contributions into your traditional 401(k) are tax-deductible. Let's say you earn $8,000 for the month and make a $1,000 contribution to your 401(k) from your paycheck. You'll only pay income taxes on $7,000 in the current year. You'll defer your taxes on the $1,000 contribution to a later date. By reducing your taxable income to $7,000, you can grab some tax wins before the year ends. 

2. Hold your investments over a year 

If you want more flexibility and control over your investments, a taxable brokerage account is something to consider. You can invest in a diversity of assets, hit the sell button anytime you want, and withdraw funds without triggering a penalty. 

As good as all of that sounds, there's one piece to watch out for: taxes. This won't be a concern until you take the profits you have accumulated in your account.

When you sell a stock for more money than you paid for it, you'll be on the hook for capital gains taxes. Investors who hold their stock for a year or less before selling will pay short-term capital gains rates. Your tax rate could be as high as 37% if you're among the highest earners in the country. However, if you're not in a rush to sell, you can save money on taxes by qualifying for the 0%, 15%, or 20% long-term capital gains rates

Let's say you and your spouse have a total taxable income of $80,000, including profits earned from stocks held over a year. If your filing status is married filing jointly, you've just hit the tax jackpot and are eligible for the 0% long-term capital gains rate. 

2021 long-term capital gains tax brackets

Taxable Income (Single Filer)

Taxable Income (Married Filing Jointly)

Taxable Income (Head of Household)

Long-Term Capital Gains Rate

$0 to $40,400

$0 to $80,800

$0 to $54,100


$40,401 to $445,850

$80,801 to $501,600

$54,101 to $473,750


Over $445,851 

Over $501,601

Over $473,751


Data source: IRS.

3. Enjoy a tax credit for saving toward retirement 

There's a special tax credit for retirement savers that many taxpayers are unaware of. It's called the Retirement Savings Contributions Credit, or the "Saver's Credit" for short. It rewards low- and moderate-income taxpayers who are 18 or over with a credit up to $1,000 (up to $2,000 for a married couple) for saving money in a qualified retirement account

The math for this credit isn't as complicated as other calculations in the tax code. Based on your adjusted gross income and filing status, you can claim a tax credit for 50%, 20%, or 10% of your total contribution for the year. This credit can produce phenomenal results on your tax return -- either reducing or wiping away your entire tax bill. 

Check the AGI eligibility table to see if you qualify. If you are a full-time student or dependent on another person's tax return, you won't be eligible to claim the Saver's Credit. 

2021 Saver's Credit rate and AGI eligibility by filing status


AGI (Married Filing Jointly)

AGI (Head of Household)

AGI (All Other Filers)

50% of your contribution 

$0 to $39,500

$0 to $29,625

$0 to $19,750

20% of your contribution 

$39,501 to $43,000

$29,626 to $32,250

$19,751 to $21,500

10% of your contribution

$43,001 to $66,000

$32,251 to $49,500

$21,501 to $33,000

Not available 

Over $66,000

Over $49,500

Over $33,000

Data source: IRS.

Maximize your tax savings 

The tax code is loaded with tax savings that you can take advantage of this year. Not only do you have the chance to save money, but you can also grow your money by putting your cash to work in the market. 

Start identifying all the ways you can rack up savings. You'll be surprised that your tax savings strategy could also lead to your million-dollar nest egg