3 Smart Tax Moves It’s Not Too Late To Make
Written by
Adam Palasciano
Edited by
Amen Oyiboke
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Taxes: Nobody likes them, but we all have to pay them. You may work full-time, part-time, or as an independent contractor, but you’re going to have to pay a tax bill to Uncle Sam. While we’re only a few weeks away from the April 15 deadline to file your 2024 tax return, many Americans have already filed and paid.
According to the latest IRS statistics, approximately 13.2 million tax returns have already been received for the 2025 tax season (tax year 2024), and approximately 11.7 million tax returns have already been processed. If you were proactive and got your tax return filed early, kudos to you.
However, if you haven’t filed yet, it’s not too late to make these smart tax moves to potentially keep more money in your pocket.
Don’t Miss the April 15th Deadline
CNBC explained that whether it’s to make contributions to your IRA or HSA or to file your entire tax return, it’s important not to wait until the last minute. As a rule of thumb, it’s safer to get everything done by April 1 to leave extra time for transactions to be processed. This may help you avoid any fees or tax penalties.
Make Retirement Account Contributions
Contributing to your retirement accounts is a smart way to reduce your overall tax liability. The more you contribute toward your 401(k) or IRA this year, the less taxes you’ll owe to the IRS come April 15 since you’ll be deferring tax liability on those funds until you retire.
According to the IRS, the tax year 2024 contribution limit for 401(k)s is $23,000 plus a $7,500 catch-up contribution for those age 50 or older. Meanwhile, traditional and Roth IRA contribution limits are $7,000 plus a $1,000 catch-up contribution for those age 50 or older.
Check Out Tax Credits
Taking full advantage of tax credits is crucial to keeping more money in your pocket. H&R Block explained that tax credits provide a dollar-for-dollar tax reduction, making them more beneficial than most tax deductions.
So, if a tax credit is worth $2,000, it will reduce your tax bill by $2,000. Meanwhile, deductions only reduce your tax liability by a certain percentage. Unfortunately, many taxpayers aren’t aware of tax credits and unnecessarily fork over more money to Uncle Sam than they’re required to pay.
Beneficial tax credits to research include the Retirement Savers Contribution Credit, Child and Dependent Care Credit, Lifetime Learning Credit and the American Opportunity Tax Credit.
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