tax help

[helpme99]

What is the name of your state?What is the name of your state?FONT=Arial]What is the name of your state? ny

hello. i have a a question on how i can reduce the amount of tax i pay each year, come filing time. i am single and make just over $30k per year, but when i file my yearly taxes i owe money -- every single year. i, like the next person, already feel i am taxed enough, so how/what can i do to reduce the amount of tax taken from the paycheck or owed at the end of the year.

looking at my w-2,
federal: 2
state: 2
local: 2

i have read that i can re-do a w-4 to reduce the amount of tax take from my paycheck, but won't that mean i owe more at the end of the year?

does anyone have any tips or "free advice."

thanks in advance.[/FONT]

 

[Snipes5]

Yes, if you reduce the amount withheld from your paycheck, you will owe more at the end of the year.

If you want to lower your taxes, you have several options.

If your employer has a 401K plan, put in as much as you can possibly stand. If you put in enough to lower your income below $25,000, you'll qualify for an additional credit that will further lower your taxes, in addition to what you'll save because money put into a 401K is tax deferred until you take it out at retirement.

If your employer doesn't have a 401K plan, put money into a deductible (Traditional) IRA. That will also lower your tax bite.

Buy a house. You'll build equity, and save money on your taxes.

Snipes

 

[abezon]

And if all you want is to switch from having a $200 bill to a $200 refund, change your W-4 to single 1. Single 0 will result in the largest deductions throughout the year and a bigger refund, but you're using the IRS as a savings account & they don't pay interest.