Tax Tips for Finance

Tax Saving Techniques

Some generally recognized financial planning tools that may help you reduce your tax bill.

Deducting Mortgage Interest

If you own a home, you can claim a deduction for the interest paid. To be deductible, the interest you pay must be on a loan secured by your primary or second home. The loan can be a first or second mortgage, a home improvement, or a home equity loan.

Capital Gains and Losses

Almost everything you own and use for personal purposes, pleasure, or investment is a capital asset. The IRS says when you sell a capital asset, such as stocks, the difference between the amount you sell it for and your basis, usually what you paid for it, is a capital gain or a capital loss.

Coverdell Education Savings Accounts (ESAs)

A Coverdell ESA is a savings account created to encourage parents and students to save for education expenses.

Individual Retirement Accounts (IRAs)

You may be able to take a tax deduction for contributions to a traditional IRA, depending on whether you or your spouse, if filing jointly, are covered by an employer’s retirement plan and how much total income you have. Funds in the account grow tax-deferred, and you pay tax when you take distributions. Conversely, you cannot deduct Roth IRA contributions, but the earnings on a Roth IRA may be tax-free if you meet the conditions for a qualified distribution.