No one likes owing huge chunks of money in the name of tax. However, that is just how things are, and at the end of every financial year – one has to file and pay the total amount. Although, you can always save a decent amount of money by reducing your taxes.

Most people either choose to go for standard tax deductions or stick to itemizing the tax deductions. If you are looking for some last-minute resorts to reduce your taxes in 2023 through either of those methods, you are at the right place! In this blog, we will take a look at the top four ways you can do so. Let us begin!

4  Last-Minute Ways You Can Reduce Your Taxes In 2023

1. Increase Your Retirement Contributions

One of the smartest ways to reduce your taxes would be to contribute more to a traditional IRA. Whether your retirement savings are covered by your work insurance or are cut from your taxable income, you can use this method to save some bucks. However, in the former case, you might have to face a limit up to which you can make the contributions, which would depend on the total income of your house.

For instance, if someone contributes about 6,000 dollars to their IRA right before the deadline – i.e., middle of April – they get to save about 2,200 dollars during the tenure of that particular financial year. If you need more clarifications, back office accountants can help you with the same.

Another great thing about this method is that you are eligible to make traditional IRA contributions until the tax filing day arrives. Hence, if we talk about your taxes for the financial year of 2023, you can keep on contributing till the 15th of April, 2024.

2. Combine Expenses

Owning a business can be a great asset when it comes to implementing last-minute tax-saving strategies. For instance, you can consider combining a bunch of expenses right before the end of the financial year to save yourself from paying a decent chunk of taxes.

While there are numerous ways you can go about applying this method, you can begin by scheduling major purchases related to your business at the end of the year. This would help you save more taxes than you would have if you purchased the same amenity at the beginning of the year.

Similarly, you can also invest in amenities that you repurchase every month or two by buying them in bulk, preferably at the end of the year. This would help you save taxes for a few months until the amenities last!

3.  Use Capital Losses

Capital losses can be frustrating to deal with, but did you know that they can sometimes help you with tax deductions at the last minute as well? All you have to do is make a capital investment, such as stocks, and then sell it at a loss.

Once you are done, use it to offset important capital gains that have been realized. In situations where individuals have more realized capital losses than profits, you are granted a maximum of 3,000 dollars to offset your ordinary income (that is, of course, taxable) by the IRS.

4. Utilize Your Student Loan Interest

Student loan debts are another major issue for most individuals, but they can be used to decrease the amount of taxes that you have to pay as well! All you need is the relevant information regarding the student loan interest that you paid in the said year, along with whether you are eligible to use it for deducting the income tax that you have to pay.

Mostly, the eligibility criteria require your MAGI to lie between a specific threshold. If you want to know more about the same, it would be best to get in touch with one of the good Backoffice accounting firms near you. Once you are confirmed about your eligibility, you can save up to 2,500 dollars from your taxable income.

Conclusion

You must have certain last-minute strategies up your sleeve to decrease the amount of money that you pay in the form of taxes. However, sometimes doing all the work alone can get a little confusing, especially if you are not an expert in the field.

If you are looking for tax preparation services that can help you out in the process, you should consider checking out Back Office Accountants. From accounts receivable practices to full-service back office accounting, the experts of this firm can do it all for you. Visit their website https://www.backofficeaccountants.com/ for a quote, today!