Leveraging the Tax Code to Minimize Your Tax Liabilities

While you gear up to calculate your tax bill for 2021, consider these three strategies to potentially reduce your taxes going forward.

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(Image credit: Getty Images)

As we head toward March, one of most dreaded times of the year approaches: tax season. Right now is the time when you’re inundated with tax documents, including a W-2 from your employer, 1099s from your side gigs, 1099-MISC statements from your online brokers, 1099-Rs for retirement income and more.

There isn’t much you can do now to reduce your 2021 tax obligations outside of contributing more to tax-deferred retirement accounts. That’s why the beginning of the year is the perfect time to adopt new strategies to minimize your tax obligations for 2022.

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Initial contributionAdditional contributionTotal new contribution26 Pay Periods13 Pay Periods7 Pay Periods
$5,000$2,500$7,500$96.15$192.31$357.14
$7,500$3,750$11,250$144.23$288.46$535.71
$10,000$5,000$15,000$192.30$384.62$714.29
$12,500$6,250$18,750$240.38$480.77$892.86
Disclaimer

This article was provided by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Bulent Erol, Financial Adviser, Enrolled Agent
Principal, LHD Insurance & Financial Services

Bulent Erol is the principal in the firm LHD Insurance & Financial Services and is a 30+ year veteran of the financial services industry. Prior to starting his own financial services firm, Bulent worked in a variety of field and executive positions with Price Waterhouse, AXA and Merrill Lynch. He is an Enrolled Agent and holds the “Chartered Federal Employee Benefits Consultant” designation. He finished the curriculum for the Certified Financial Planner designation.