When we moved into our home, there were some things that we knew we wanted to upgrade. For starters, the place had some really old appliances, and we could tell they were taking up loads of energy. Instead of worrying about it, we began looking for ways to improve the house by replacing the appliances with more energy efficient versions. We found a great appliance shop that had exactly what we were looking for, and they were even having a little sale on their products. This website is completely dedicated to energy efficient items, because you never know when you will need them.
Nobody loves paying taxes. They're a necessity in life, but that does not mean you can't take a few steps to reduce your tax burden. The following are four ways you can spend your money to pay fewer taxes.
1. Invest in tax-deductible energy endeavors.
These days, there is a big push for green, eco-friendly energy. From solar panels to wind power, companies are spending a lot of money developing new technology that can produce power without burning the limited coal, natural gas, and other fossil fuels on this planet. Often, if you invest in these companies—either by buying stock or making a donation—that money will be tax deductible since the government is trying to support green energy. Reach out to green energy companies in your area, and ask about tax-deductible energy investments. Most companies will have an investment program since this is how they obtain much of their funding.
2. Put money in a SEP IRA.
Do you have a side gig that earns you any sort of money? If so, you can invest your earnings from that project into a type of individual retirement account (IRA) called a simplified employee pension (SEP) IRA. Meant for owners of small businesses and self-employed individuals, this account allows you to invest money tax-free. You don't pay any taxes on that money until you later pull it out at retirement. Guidelines vary, but most people can invest at least $10,000 a year in a SEP-IRA without paying taxes on those funds.
3. Make energy-efficient improvements to your home.
The government often offers tax credits for those who make energy-efficient improvements to their home. If you need a new washer, dryer, dishwasher, furnace, or other appliance, consider buying one before this tax year is over—and just choose one that carries the Energy Star label. Depending on the purchase, you may get anywhere from a few hundred to a few thousand dollars in tax credits.
4. Pay off your student loans.
In most cases, the money you pay towards student loan interest is tax-deductible. If you still owe quite a lot on your student loans, consider making a sizable payment—you will then owe less money in taxes, plus you'll be one step closer to having paid off your student loans.
For more advice on reducing your tax bill, reach out to an investment professional. There are additional IRAs and green energy investments they may recommend, depending on your circumstances.