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The Road Less Traveled: Unveiling 6 Clandestine Tax Strategies for the Savvy Investor

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The Vital Importance of a Signature: Double-Check Your Returns Before Submission

When it comes to tax season, overlooking the tiny details could spell catastrophe. Ensuring your tax preparer signs your returns with their Preparer Tax Identification Number (PTIN) not only reduces the chances of an audit but also shields you from potential penalties. Remember, the onus lies on you to scrutinize every nook and cranny of your tax documents.

Unlocking Wealth: Subtract Your Reinvested Dividends for Maximum Returns

Adopting a strategy like DRIP, where dividends are reinvested rather than cashed out, can be a game-changer for investors looking to boost their wealth. Nevertheless, during tax season, overlooking these reinvested dividends could result in overpaying your dues. Each reinvestment elevates your tax basis, ultimately curbing your taxable capital gain and enabling substantial savings.

Strategic Planning: ‘Bunch’ Your Deductions Into a Single Year for Optimal Tax Benefits

Amidst the allure of the standard deduction, a shrewd tactic may be to ‘bunch’ your deductions, aggregating them in a single year to surpass the thresholds. This well-thought-out maneuver may substantially diminish your taxable income, making the meticulous effort more than worthwhile in the long run.

The Art of Tax-Loss Harvesting: Offsetting Capital Gains Through Strategic Selling

Embarking on a quest for tax savings demands a certain level of strategy. Enter tax-loss harvesting — a tactical move that permits investors to offset capital gains by selling investments that have depreciated in value. Not only does this reduce your tax bill, but it also affords you the opportunity to recalibrate your investment portfolio effectively.

Self-Employed? There’s More Than Meets the Eye: Uncovering The Potential of Itemizing Deductions

For the self-employed, the possibilities extend far beyond the standard deduction. The IRS generously allows contractors and business proprietors to itemize various expenses, including those related to vehicles, education, rent, advertising, and technology. By carefully documenting these expenses, individuals can potentially unlock a treasure trove of deductibles.

Accessibility and Assistance: Families Embracing Free Tax Filing Options

The IRS, albeit unpredictably, offers a silver lining for families seeking to file their federal taxes at no cost. Through options such as IRS Direct File, IRS Free File, and MilTax, families can navigate the tax terrain with ease, leveraging services that encompass online preparation, electronic filing, and even direct deposit refunds — all at no additional charge.

This article originally appeared on
GOBankingRates.com:
6 Tax Tricks the IRS Doesn’t Tell You

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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