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# Legal Tax Reduction Strategies
**Maximize retirement contributions.** If you have access to a 401(k), 403(b), or IRA, contribute the maximum allowed. These reduce your taxable income dollar-for-dollar. For 2024, that's $23,500 for 401(k)s and $7,000 for IRAs (higher if you're 50+).
**Claim all eligible deductions.** If you itemize, track medical expenses over 7.5% of AGI, charitable donations, mortgage interest, and state/local taxes (capped at $10,000). Many people leave money on the table by not documenting these.
**Use HSAs strategically.** Health Savings Accounts offer triple tax benefits—deductible contributions, tax-free growth, and tax-free withdrawals for medical expenses. They're often overlooked.
**Harvest tax losses.** If you have investment losses, use them to offset capital gains. You can carry unused losses forward indefinitely.
**Time income and deductions.** If self-employed or freelancing, consider whether deferring income to next year or accelerating deductions this year makes sense based on your expected tax bracket.
**Take advantage of business deductions.** If self-employed, deduct home office expenses, equipment, education, and professional services. Keep meticulous records.
**Consider tax-advantaged accounts.** 529 plans for education, dependent care FSAs, and commuter benefits reduce taxable income.
The key is being proactive throughout the year rather than scrambling at tax time. Consider consulting a tax professional for your specific situation—they often identify deductions you'd miss.
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