Tax reduction strategies

Pali
Pali Member Posts: 1 Newcomer
in Live Q/A Event

Hello,

Is there a way I can find out how much my taxes will be (is there a free program I can use to try and calculate it)? If I end up owing taxes, are there some strategies I can do to reduce that, such as making charitable donations? Does contributing to my 401k reduce my tax burden as well? If so, are these direct subtractions from my overall gross income or just a percentage?


Thank you

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Answers

  • KristineS
    KristineS FreeTaxUSA Agent Posts: 177

    Hi Pali,

    Our 2024 software is now open. You can enter information you know/have that includes all relevant data such as filing status, age, dependents, etc. While your paystub is not official like your W-2, it can give you a rough idea to help calculate what amount of tax may or many not be owed.

    If you owe tax on your tax return when you're preparing it, it's generally too late to change the outcome. Contributing to an IRA before April 15, 2025 'might' reduce a tax burden. Facts and circumstances matter.

    You'll want to make charitable contributions before 12.31.2024.

    Contributing to your 401(k) at your place of employment helps to reduce the amount of tax owed, yes, because your employer is taking this money and setting it aside in a retirement account before it's taxed on your paycheck. This must be set up with your employer and all 401(k) contributions completed by 12.31.2024.

    You are welcome to use the 2024 FreeTaxUSA software that has been released to get an idea of what tax you may or may not owe. https://www.freetaxusa.com/

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