Thankfully, this tax season should be a little easier for individuals than last year as there are fewer uncertainties about changing tax laws. For most taxpayers, they should not expect to pay more in taxes this year with all else being equal (i.e. marital status, income, state of residence etc.). Still, almost all taxpayers can explore the below strategies to lower their taxes in 2013.

Reduce taxable income through retirement plan contributions
Many individuals can certainly benefit by taking full advantage of their retirement plans. You can contribute up to $17,500 ($23,000 if 50 or older) to your employer sponsored 401(k) account to lower your taxable income by that same amount. This action alone can significantly reduce your taxes. For instance, you may be able to lower your ordinary income tax bracket all together, which can translate to a lower capital gains tax due on any realized gains for the year. Not to mention, you may even avoid the new investment income surtax. To refresh your memory, single taxpayers with a MAGI of $200,000 or more ($250,000 or more for joint filers), will pay a 3.8% surtax on unearned income, including interest, dividends, royalties, rents and capital gains. Please note that you have up until December 31, 2013 to contribute to the plan.

You may also be able to lower your taxable income by contributing the maximum amount to a traditional IRA or $5,500 ($6,500 if you’re 50 or older). If you’re already covered by an employer sponsored plan, the full deduction begins to phase out when your MAGI exceeds $59,000 for single filers and $95,000 for joint filers. There aren’t any income restrictions for those that do not already have an employer sponsored plan. Lastly, please note that you have up until April 15, 2014 to claim the contribution on your 2013 tax return. Therefore, you can certainly wait until after the end of the year to see if the contribution makes sense for you.

A Roth IRA is another retirement account that provides some great tax benefits over the long-term. The contributions appreciate tax-free. However, unlike a traditional IRA or 401(k), there is no deduction to be claimed in the year the contribution is made.

Selling investment losses to offset ordinary income
Another way you can lower your taxable income is by selling investments that are at capital losses for the year. After netting your capital gains against losses, you can offset up to $3,000 of ordinary income and carry-forward the remaining amount for future years. Please note that the character of the investment as long-term versus short-term will impact the way in which gains and losses are netted. Also, if you intend to keep these investments for the long-term, you may want to hold off on selling as you’ll be restricted in re-purchasing the securities within 30 days of the sale.

You can also lower your tax bill by giving to charity
If you’d like to consider donating cash, stock or property to your favorite charity, now is the time to start exploring these options. Generally speaking, the maximum tax deduction for contributing cash is up to 50% of your MAGI. If you’re planning on contributing property, please keep in mind that it can get complicated. Specifically, if there is a capital gain associated with the fair market value of the contributed property, you could only contribute up to 30% of your AGI unless you choose to reduce the gain associated with the FMV of the property. However, when donating appreciated securities to charity, you and the charity can avoid capital gains taxes. Plus, you can deduct the market value of the securities, which will reduce your taxable income. Still, in some instances, you may not be able to contribute more than 20% of your AGI.

More tax questions? Browse answers or ask tax questions online. You can also find an accountant online here.

Related Articles
->The Key Tax Breaks That Are Set To Expire At The End Of 2013
->What Should You Do Given The 2013 Tax Filing Delay?
->Tax Advice For The Looming 2012 Tax Extension Deadline
->When Should I Start Filing My 2012 Tax Returns?
->Why Is My 2012 Tax Refund Less Than It Was For 2011?
->What Does The Fiscal Deal Mean For Your 2012 & 2013 Taxes?
->Tax Planning Strategies to Mitigate Your Risk for Higher Taxes in 2013