We’re all looking for ways to save money. And, one of the best places to look for savings is in your taxes. There are lots of ways to reduce your taxes; so make sure that you’re taking advantage of each and every one that’s available.
Reduce your taxes by making your home energy efficient. When it’s time to make home improvements, be certain that you’re making energy efficient ones. Not only will buying, let’s say, an energy efficient hot water heater save you money on your utility bill each month, but if you purchase a hot water heater that is Energy Star rated, you’ll reduce your taxes in the year you purchase it, as well. Energy Star is a government program for rating the energy efficiency rating on products. So, be certain when you purchase large appliances, or other things like replacement windows, that they come with the energy star rating. Save your receipts and use them when you file your taxes to figure the deduction. The deduction is typically 10 of the cost of installing solar water-heating, photovoltaic, or fuel-cell equipment in your home, up to $2,000 total. No credit is allowed for equipment used to heat a swimming pool or hot tub. Again, this is a great way to reduce your energy expenses month after month and reduce your taxes.
Buy a hybrid car – You can reduce your taxes by purchasing an energy efficient car, like a hybrid. There are tax credits available for a variety of fuel efficient automobiles. Check out the credits before you buy – in some cases you can qualify for over $3000 in tax credit. In addition, you’ll save money on fuel each and every month that you own the car, and you’re doing the environment a favor, too.
Take a look at your stock portfolio – If you have some stocks that have tanked since you purchased them, now’s the time to sell them. When you sell stocks at a loss, you can deduct the loss from your taxes. And, when your stocks are doing well, you’ll reduce your taxes when you sell them by holding on to them long term. Long term capital gains taxes on stocks are around 15. So, if you’re thinking of selling a good stock, be certain to check on how long you’ve held it.