There are several other convenient tax-related tips for 2023. For instance, real estate investing remains one of the easiest and most financially lucrative tactics for minimizing the amount you pay to the government. Other powerful techniques include:

Using a paid preparer instead of filling out forms on your own
Maximizing IRA contributions
Filing on time or early
Using the educational resources available on the IRS.gov website

Consider the following tips to see which ones work best for you.

Filing Early Has Multiple Benefits

If you have all the forms needed for your return, it’s possible to file as early as Jan. 3, but the IRS only processes documents in the last few days of January. Still, consider either mailing or e-filing your paperwork as soon as you assemble all the necessary W-2s, 1099s, etc. Two enormous benefits: if you’re getting a refund, it will arrive sooner if you file early, and by avoiding the rush, you are less susceptible to identity theft.

Real Estate Investing Can Reduce Taxes

Several types of investments can take the sting out of a taxation bill. One of them is real estate investing. Utilizing vacation rental tax deductions can add up fast and reduce the amount of money owed to the IRS. That’s one reason so many working people of all ages and income levels explore the benefits of real estate ownership. Of course, dozens of perks come with buying a vacation rental property. Most have at least heard of the agencies like HomeAway and Airbnb. There’s also VRBO, and they all work the same way: homeowners reduce their tax bills by offering their houses for rent on the short-term vacation market.

Not only are the potential deductions generous, but it’s imperative to determine if your property qualifies for the maximum benefits. The savings can be substantial if your vacation rental property allows for some or all of the deductions. Check the IRS rules about how these properties can meet the relevant criteria. It’s also wise to learn about the specific rental-related deductions and see which ones you can legally use to pay less in taxes for one or more years. The overall goal is to earn rental income and keep more of it in your own hands.

Using a Paid Preparer Minimizes Snafus

Be bold and spend a couple of hundred bucks on a professional preparer. It’s one of the essentials to better manage your finances and also the single most effective way to avoid costly errors, late fees, penalties, and careless mistakes that can slow down a refund check. But don’t just hand over the documents and assume all is well. The best preparers will want you to work with them, double-check the math, review the final version of the return, etc. It’s wiser to pay a modest fee now than a huge one later or receive a refund many weeks later.

There are New IRA Contribution Limits

Retirement day gets closer every year. That’s why it’s always good to know working adults’ annual IRA contribution limits. Remember two pertinent facts about individual retirement accounts: couples contribute as two individuals, so each should maintain separate accounts. But that’s good because married couples can effectively double their retirement savings. It’s wise to contribute the maximum amount to an IRA every year.

Second, there are two general types of IRAs, and they operate in totally different ways. Roth versions use after-tax income but are not taxed when you withdraw the money after age 59.5. Non-Roth accounts use pre-tax income, so you get a deduction now but not later. However, retirees are usually in lower income brackets and pay less at withdrawal time. The new annual IRA per-person limits are $6,500 for people under 50 and $7,500 for those 50 and older.

File on Time Even If You Can’t Pay the Full Bill

What if you owe, for example, $2,000 to the government but can’t pay it all at the time of filing? Be smart and file the forms early or on time to avoid a late filing penalty. Also, pay as much of the total bill as possible when you send the return.