Hello @chica0533 !
You have mentioned all of the traditional ways to increase deductions, thus reducing taxable income. I will address each:
- Owning your home
- Owning your home can help greatly on your taxes, as you are able to deduct mortgage interest and property taxes as itemized deductions on Schedule A.
- Stocks
- Purchasing stock outright is not going to lower your tax liability, however, if your employer offers an ESPP plan in lieu of cash compensation, for example, this could be a way to reduce your Box 1 income on W-2.
- 401k
- If you can afford it, you should absolutely max out your pre-tax 401k contributions. For 2022, you can contribute up to $20,500 pre-tax.
- Charitable donations
- You can deduct money donated to charity up to 60% of your AGI (adjusted gross income) in 2022.
For taxpayers in your situation, mortgage expenses and charitable donations make up the vast majority of itemized deductions, so that is where you should focus along with taking advantage of any and all pre-tax deduction programs offered by your employer.
I hope this helps you!
All my best,
Adam, EA
TurboTax Live Expert
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