Middle-Class Workers: 4 IRS Rules That Help You Keep More Money
Written by
Jamela Adam
Edited by
Molly Sullivan
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Taxes are one of the biggest expenses for middle-class workers, but the IRS actually offers a few rules and breaks that can help you keep more of your money this tax season.
Here are four IRS rules worth paying attention to.
The Standard Deduction Is Higher This Year
One of the easiest ways to lower your taxable income is the standard deduction.
The standard deduction for 2025 is $15,750 for single filers and married people filing separately. That means you can automatically reduce your taxable income by that amount without having to itemize anything.
For many middle-class workers, this alone can significantly reduce their tax bills. And if you don’t have enough deductions to itemize anymore, taking the standard deduction will probably make the most financial sense.
Retirement Contributions Can Lower Your Taxes
You can also lower your tax bill if you’re contributing to a traditional 401(k) or IRA. For example, if you contribute $5,000 to a traditional 401(k), your taxable income drops by $5,000. That can put you in a lower tax bracket or reduce the overall amount you owe. And if you consistently contribute each year, you also get to build long-term wealth through compounding.
The Saver’s Credit Rewards You for Investing
On top of reducing your taxable income, you might also qualify for the saver’s credit, which is a lesser-known tax credit designed for low- to middle-income workers. The saver’s credit gives you a tax credit of 50%, 20% or 10% on the first $2,000 in contributions you make to a retirement account. And unlike deductions, credits directly reduce your tax bill dollar-for-dollar.
Many eligible people miss this credit simply because they don’t know it exists.
HSAs Offer Triple Tax Advantages
If you have a high-deductible health plan, you may be eligible for a health savings account (HSA). HSAs come with three major benefits. Your contributions are tax-deductible, your money grows tax-free and your withdrawals are tax-free when used for qualified medical expenses.
That triple tax advantage can be pretty beneficial if you use your HSA as a long-term savings tool rather than spending it right away.
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