Tips you can still take advantage of to save up to thousands of dollars on your tax return!

Today, we are going over 3 things you can do right now before filing the 2019 tax return. Please comment down below if any of these tips helped you and topics that you would like to see more of. I made this channel so that I can help people. Subscribe, like this video so that with the YouTube algorithm, it can reach more people.

Tip #1: Contribute to a Traditional IRA
You have until 4/15 to deposit up to $6,000 into a traditional IRA for the 2019 tax return season and if you are 50 or older, you can contribute an additional $1000. Okay? Now, what does that mean in terms of taxes? A Traditional IRA contribution can lower the amount the government tax you, unless you make above a certain amount, which means you are pretty well off, in that case, contribute to a Roth IRA because this won’t help you.
Let’s say you made $45,000 last year, and you’ll be taxed on all $45,000. The government wants to encourage you to save for retirement, so any amount that you put into a traditional IRA can lower the amount that you’ll be taxed on. Let’s say you put $4,000 into your traditional IRA. That means the government will only tax you on $41,000. That is $880 in savings. WOOOWWW, let that sink in for a moment. Now you wonder, what if I contribute the whole $6,000? That could mean $1320 savings in taxes.
If you have not opened up an IRA before, you can utilize several investment companies to do so such as fidelity, vanguard or if you prefer a more hands-off approach, look into betterment and wealth front.



Tip #2: Fund a Health Savings Account
It’s like a savings account to pay for health-related costs that is not already covered by insurance.
The benefit of health savings account instead of a regular savings account is.
- The money you put into it is money before taxes are taken out, it can lower your taxable income
- The money grows tax-free.
- Payments for qualified medical expenses are tax-free.
For a single person, the limit is $3500, and for a couple, it is $7000, and if you are 55 years or older, you can add an additional $1,000.
Being single and contributing $3500 to a Health Savings Plan, you can lower your federal taxes by $660.
In combination with a traditional IRA, you can save $2,090.

Tip #3: Collect tax credits
A tax credit can increase the amount of money you get back from the government or lower the amount you must pay. It’s a dollar for dollar equivalent. A tax deduction is to reduce the taxable income that you have. In other words, the tax credit is better than a tax deduction.
Some tax credits you can take advantage of, in theory, your tax person would remind you of all these:
- Each qualifying child under 17 years old in your household is $2,000 tax credit
- Daycare or children services may qualify for the tax credit. Look up the Child and Dependent Care Tax Credit (CDCTC in short). That can be up to $3,000 for 1 child or $6,000 for two or more children of tax credit
- Earned income tax credit is more low or modest income people with or without children.

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