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A single adult earning $48,000 finds themselves paying 22% on their top-taxed dollars.
Try these tax breaks available tomiddle-class families in 2025.
With one child, families can take a credit up to $4,213.
See the full table from theIRSshowcasing the income limits based on the number of children you have.
It offers a maximum tax credit of up to $2,000 for individuals and $4,000 for couples.
In addition to the deduction, these taxpayers can take the full credit amount directly off their tax bill.
Fortunately for them, they can often take tax deductions through their business.
Likewise, self-employed workers can pay for business-related travel, mileage and meals as business expenses.
You lower your tax bill today, and invest money for tomorrow.
Consider it a win-win.
Tax nerds refer to this as a backdoor Roth contribution.
Tax-Free Compounding and Withdrawals
The money you invest through Roth retirement accounts and HSAs compounds tax-free.
And you pay no taxes on withdrawals later, either.
Its the only account that offers both tax-free contributions and withdrawals.
In fact, some Americans use HSAs as a secondary retirement account.
They know theyll have no shortage of qualified health expenses in retirement, after all.
And withdrawals for non-medical expenses are tax free after age 65.
Tax Loss Harvesting
Have capital gains or investment income that drag up your tax bill?
Consider tax loss harvesting.
You sell your shares and immediately buy new shares in a mid-cap stock fund.
You then show the loss on your tax return, to offset gains from other investments.
You have to pick one or the other for each student you want to claim.
The law applies between January 1, 2020, and February 2025.
In other words, you’re able to still take the standard deduction while also deducting disaster-related losses.
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