Pay Less Tax Going Forward With These 15 Moves

Nobody likes paying the IRS more money than necessary. If you're looking to slash your tax bill, here are a few key moves worth making.

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The more money you put into your IRA, the more of a nest egg you stand to retire with. But also, if you fund a traditional IRA, the money you put in will represent earnings the IRS can't tax you on.

Maxing out a 401(k) plan is tough. But if you're able to sneak more money into your employer savings plan, you can shield more of your income from the IRS, assuming you fund a traditional 401(k), not a Roth.

If you're 50 or older, you can put extra money into your IRA or 401(k). It pays to do so and keep the IRS from taxing a larger portion of your earnings.

If your employer offers a flexible spending account (FSA), it pays to sign up. That way, you'll get to allocate pre-tax dollars to medical bills, and you'll also have a dedicated means of covering those bills as they roll in during the year.

If you're enrolled in a high-deductible health insurance plan, you may be eligible to fund a health savings account, or HSA. Like traditional IRAs and 401(k)s, HSA contributions go in tax-free. And with an HSA, you don't have to spend down your balance within a year like with an FSA. Rather, you can carry your funds all the way into retirement.

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Business owners are often privy to a host of tax breaks. If you're already self-employed, it pays to consult a tax professional and see if starting a business makes sense for you.

ALSO READ: 10 Checklist Items to Help Start Your Small Business

Anyone who's self-employed or owns a business can deduct certain expenses on their taxes. But you'll need to keep accurate records of what you spend in the course of doing your job. That way, you'll know what amounts to claim and won't potentially miss out on any write-offs.

Even if your tax situation isn't all that complicated, it could pay to enlist the help of a professional for advice. You may find that the modest fee you're charged more than pays for itself when you account for the savings you're able to reap.

Selling assets at a profit in a regular brokerage account will trigger taxes you'll need to pay. But if you make sure to hold your investments for at least a year and a day before selling them, you can avoid short-term capital gains, which cause more of a tax burden than long-term capital gains.

ALSO READ: What Is Capital Gains Tax?

The IRS makes a number of valuable credits available to tax filers. It pays to read up on today's tax credits to see which ones you might be eligible for the next time you file a tax return.

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Claiming the right tax deductions could help keep your IRS burden to a minimum. It could pay to bundle certain deductions, such as charitable contributions, if you're right on the cusp of itemizing versus taking the standard deduction.

If you have a losing stock in your portfolio, selling it at a loss could work to your advantage. That's because you'll have the option to use your loss to offset capital gains. And if you don't have gains to offset, you can use an investment loss to offset some of your ordinary income.

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming all have no state income tax. Moving to one of these states could result in you paying less tax on a whole.

Bonds can be a good source of steady interest income, but it pays to favor municipal bonds over corporate bonds. With the latter, your interest payments will be taxable, whereas municipal bond interest is always tax-exempt at the federal level. And it's sometimes exempt from state and local taxes as well.

ALSO READ: Here's Why Municipal Bonds Belong in Every Investor's Portfolio

The more you read up on the tax code, the better equipped you'll be to eke out savings. Pay attention to tax changes that might impact you -- even if you're not gearing up to file a return anytime soon.

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Presented by Motley Fool Stock Advisor
We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

The last thing you want to do is pay the IRS a penny more than you have to. Follow these tips, and you might manage to nicely shrink your tax burden -- and keep more of your earnings for yourself.

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