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2018588583
FiLifer
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2018588583 asked about a year ago in Individual Retirement Account (IRA)

What can i do to reduce my tax burden?

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Ari Weinberg
FiLife Contributor
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What kinds of things are you looking for? There are numerous possibilities for tax deductions - many of them relate to certain asset purchases (homes, green cars sometimes). Others relate to home businesses or sole proprietorships and travel for work.

You can also find deductions for child care, elder care and others. Here are a few little know deductions - http://www.filife.com/guides/eight-littleknown-tax-deductions-that-can-lower-your-bill and here's an update on what to expect this year - http://www.filife.com/stories/changes-abound-on-new-tax-forms

Of course, another way to do it is to make less money!

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Michael Kitces
FiLife Contributor
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2018588583,
You've posted this question in the IRAs section, although I'm not certain if you meant to be referring to IRAs in particular.

Ari has already provided some great suggestions above for tax planning in general. If you're talking about your IRA in particular, the reality is that there's very little you can do directly to reduce the tax burden of taking withdrawals from your IRA. Certainly, any tax planning steps that reduce your income overall can help, whether it's to reduce income from your job or income from your IRA.

But the reality is that an IRA is treated entirely as taxable income when you take withdrawals from it - that's the consequence of getting all those tax deductions when you put the money into it in the first place, and also got tax-deferred growth along the way!

I hope that helps a little!

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