3 ways to help reduce next years tax bill.

By far, the best way to lower your taxes is to save more for your retirement. Not only do you get a lower tax bill now, you're also creating your own financial security in the process.

Saving money in tax-deferred retirement accounts such as a traditional IRA or 401(k) can reduce your taxable income by quite a bit. You could qualify for up to $5,500 in tax-deferred contributions to a traditional IRA for the 2016 tax year, and an additional $1,000 if you're 50 or older.

There are several tax breaks that come along with homeownership, and they can combine to save you a good chunk of money on your taxes. These include:

Mortgage interest
Mortgage insurance premiums
Property taxes
"Points" you pay to obtain a mortgage
The most widely known benefit is the mortgage interest deduction. If you itemize deductions on your tax return, you can write off the interest you pay on mortgage debt on a first and second home, on up to $1 million in original mortgage balances. In addition to the interest, you can also include any mortgage insurance premiums you're required to pay.

Another great way to save on your taxes is to contribute to causes near and dear to you. The IRS lets itemizers deduct donations to qualified non-profit organizations and charities, including cash donations as well as property.

Keep in mind you'll need to be able to document your donations, and the documentation requirements are stricter for higher-valued donations. For example, a simple receipt with the charity's name is just fine for property valued at less than $250. However, if you donate say, a car or boat worth more than $5,000, a professional appraisal is required.

These three things can trim thousands of dollars off your tax bill, but the benefits don't stop there. By aggressively saving and investing for retirement, you can help ensure your own financial security later in life. Buying a home can lock in your housing payment, while all of your rent-paying friends watch theirs increase every year. And finally, charitable giving can benefit organizations and people in need in infinite possible ways.

Courtesy of USAToday

For more information contact Neikirk, Mahoney and Smith at 502-896-2999