5 Completely Legal Ways to Lower Your Taxes
We all want to pay the IRS as little money as possible. But while there are a number of underhanded -- and illegal -- ways to go about that, like hiding some of your earned income, clearly, you should plan to stick to legitimate tactics to lower your taxes. Here are a few options in that regard.
Funding a traditional 401(k) or IRA will help ensure that you have enough money to live on during retirement. But that's not all -- the money you put into these accounts is income the IRS won't tax you on, so you'll reap some immediate savings as well. In 2020, you can contribute up to $19,500 to a 401(k) if you're under 50, or $26,000 if you're 50 or older. With an IRA, these limits stand at $6,000 and $7,000, respectively.
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