Tips to follow before the end of the year to reduce the taxes you will pay in 2025
There are only a few weeks left before the 2025 tax season begins. Here are a few tips to keep in mind that would help you reduce your tax burden.
The onset of the holidays is also a reminder that you have only a few weeks left until the beginning of the next tax season. This is expected to start at the end of January next year, when the Internal Revenue Service begins accepting and processing returns for the 2024 tax year.
Taxpayers are required to file their return and pay their fair share of taxes unless their income falls below the standard deduction amounts. Those with higher incomes must pay taxes. However, you can reduce your tax burden by following some tips.
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Tips to follow before the end of the year to reduce the taxes you will pay in 2025
There are several steps you can take to reduce your tax bill. For example, if you have access to your retirement plans, such as a 401(k), 403(b) or 457, you still have time to make a contribution to reduce the amount of money you owe in income taxes.
You can also donate some money to reduce your tax bill. This year, you’re allowed to give anyone up to $18,000 without having to report it to the IRS for gift tax purposes.
Health checkups and purchases can also be deducted when filing your tax return, so we recommend saving all of your receipts.
READ ALSO:Increased Social Security payments coming soon
How much tax should you pay to the IRS? Tax rates for 2025
Each year, the IRS sets tax rates, or percentages of taxes paid based on a person’s taxable income. This is defined as any income, whether earned or not, that is subject to federal taxes, .
Your tax rate depends on your filing status. For tax year 2024, which is due in 2025, these are the tax rates:
- 37% for single individual taxpayers with income over $609,350 ($731,200 for married couples filing jointly).
- 35% for income over $243,725 ($487,450 for married couples filing jointly).
- 32% for income over $191,950 ($383,900 for married couples filing jointly).
- 24% for income over $100,525 ($201,050 for married couples filing jointly).
- 22% for income over $47,150 ($94,300 for married couples filing jointly).
- 12% for income over $11,600 ($23,200 for married couples filing jointly).
To reduce their tax bill, taxpayers can either take the standard deduction that applies to them or itemize their deductions.
If personal deductions exceed the standard deduction amount, the taxpayer receives a greater benefit, as it further lowers their taxable income and puts them in a lower tax rate, meaning they may pay less tax.
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