Taxes For Dummies

Chapter 29

Ten Overlooked Opportunities to Trim Your Taxes

IN THIS CHAPTER

Finding ways to reduce your taxes

Looking at your income and your deductions

This chapter presents the more commonly overlooked opportunities to reduce individual income taxes. The income tax you pay is based on your taxable income minus your deductions. We start first with overlooked ways to minimize your taxable income. Then we move on to often-ignored deductions. We don’t want you to be like all those people who miss out on perfectly legal tax-reduction strategies simply because they don’t know what they don’t know.

Make Your Savings Work for You

Out of apathy or lack of knowledge of better options, far too many people keep extra cash dozing away in their bank accounts. Yes, the bank has a vault and sometimes-friendly tellers who may greet you by name if you bank locally, but banks also characteristically pay relatively low rates of interest. Keeping your household checking account at a bank is fine, but even with such transaction accounts you’ve got other options today with investment firms’ cash management accounts, but you’re generally throwing away some interest if you keep your extra savings money in most banks.

During periods of more normal interest rates, the better money market mutual funds ...