At this time of year you will see many articles written about selling losing stock positions against stock gains you have made during the year to reduce your tax bill. That is, if you are fortunate enough to hold stock positions, winning or losing!
One of the easiest ways to lower taxable income is to increase your contributions to your 401k or 403b. For every dollar you contribute, that's a dollar not included on your W-2.
Here's an example:
Kelsey makes $65,000 and contributes $10,000 to a 401k. (That's app. $384 per pay check. But because it's pretax Kelsey's take home pay is only $257 less because $127 was not withheld for taxes). Kelsey contributed $384 twice a month over the year, so the W-2 for 2013 will read "taxable income" $55,000.
Call HR to open a 401k or 403b or to learn when you may increase your contribution to pay less in taxes in 2014.
FYI
If you run your own company and want to contribute to a tax-deferred plan like a SEP IRA (simplified employee plan) for 2012, you MUST open that account before Dec. 31, 2013. Don't wait until April, you'll be too late!
If this $ Tip does not apply to you, pass it along to a daughter, son, nephew, cousin, friend who might benefit by paying less in taxes.
