I filed my taxes for 2024 and found that I owed Federal Taxes. Looking ahead to my 2025 tax filing, I’m exploring ways to reduce my tax liability. Here’s my current situation:
- I file married jointly.
- I am a W2 employee.
- I have a 401k, Traditional IRA, ROTH IRA, and a Brokerage account.
- Due to my MAGI exceeding $136K, contributing to a Traditional IRA for tax reduction isn’t an option.
- I’ve maximized my HSA contributions.
- I’ve also maximized my 401k contributions.
- My wife hasn’t fully maxed out her 401k contributions; she’s currently contributing about 10% of the allowable limit for 2023.
- For deductions this year, I claimed my two children, mortgage interest, and other standard items; I didn’t have significant medical expenses.
Considering these factors, would increasing my federal deductions from each paycheck be the best strategy to avoid owing taxes at year-end?