2. Don’t forget about your retirement account

Experts say that another easy way to lower the amount of taxes you have to pay each year is by opening your retirement account. The best part is that this method can be used by anyone. If you’re a young adult who thinks that you don’t need something like this, you’re going to retire someday, aren’t you? See, so you need it.

If you think of opening a traditional 401(k) plan or an IRA account, those amounts of money can actually be deducted from your taxable income, which means that you won’t have to pay as many federal taxes as you would’ve without this method. And that is not all: those funds also grow without any taxes until you decide to retire. Isn’t that great?

If the first 2 types of accounts mentioned aren’t for you, you can open a Roth account, which is funded with after-tax dollars. However, you won’t receive any tax deduction, but the money that is in that specific account will grow tax-free, and you’ll also be able to withdraw it in retirement without paying anything extra.

Don’t forget that you should make your contributions to workplace 401(k) accounts by the end of the calendar year (by the end of 2023, for example), while tax-deductible contributions for traditional IRAs can be made until the tax-filing deadline.