In general, the more you make the more you pay. If you are owing at the end of the year, you should be make estimated tax payments throughout the year.
But some things you can do to lower your tax liability for next year would be:
- Maximize your retirement savings. You can contribute up to $23,000 to a 401K or $7,000 to an IRA. This will defer your taxes on the income until you withdrawal the funds.
- Contribute to a FSA through your employer.
- Do a home energy project. Doing something like replacing windows, doors or insulation can reduce your tax liability by up to $1,200. If you invest in solar or wind energy home improvement, the credit is 30% of the cost of the project with no cap. It can reduce all of your tax liability for the year and can be carried forward until used all up.
- Buy a new or used hybrid or electric vehicle. This credit can be worth up to $7,500 for new vehicles and $4,000 for used. For a single individual there is an income limit of $150,000 for a new EV and $75,000 for an used EV.
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