If there’s one area of personal finance where myths, confusion, and frustration run rampant, it’s taxes. And the timing of this post is intentional.
Most people wait until April, sitting in front of their CPA or tax software, hoping to “find” deductions and save money. But here’s the shocker: by then, most of the decisions that actually move the needle have already been made.
Which means if you truly want to lower your tax bill, the work has to start now, while you still have time to make intentional choices before year-end.
The Myth of the “Secret Tax Button”
Let’s clear up one of the biggest misconceptions about taxes. Many believe there’s a magical button on the tax return, like a hidden line item or secret CPA trick that will unlock thousands in hidden tax savings.
Sadly, for us all, there is no magic button.
Your tax return is just a reflection of the choices you made throughout the year. Think of it as a receipt of how you’ve used your money, not a problem your accountant can “fix” after the fact.
Here’s one of the biggest problems I see. Too many people ask:
- “What can someone else do for me? How can you fix my situation? How can you save me money?”
Instead of asking the much more important questions:
- “What can I do with my money? How can I direct my money in a way that saves me taxes?”
That’s the difference between scrambling in April and creating real savings today and for the future.
Tax Planning is About Intention, Not Tricks
The only way to meaningfully reduce your taxes is to take ownership of your financial decisions. Taxes aren’t just a once a year event, they’re the outcome of how you manage money throughout the year.
And here’s the empowering part: you get to decide where your money goes.
Instead of handing more over to the IRS by default, you can direct dollars into:
- Retirement savings
- Healthcare accounts for current or future health related expenses
- Your children’s future, think retirement or education
- Your home or real estate investments
- Your business and professional growth
The more intentional you are, the more control you keep.
The 3 Key Layers of Tax Planning
1. Lowering Your Adjusted Gross Income (AGI)
Your AGI isn’t just a number, it’s the gateway to nearly every other tax benefit (or consequence).
It determines whether you qualify for Roth IRA contributions, how much you’ll owe on student loans, eligibility for certain credits, and even whether you face extra investment taxes.
Ways to lower your AGI include:
- Employer provided pre tax benefits
This includes Traditional (not Roth) 401K contributions, Health Savings Accounts (HSA), Flexible Spending Accounts (FSA), and Dependent Care FSAs. These dollars are taken out of your paycheck before taxes are applied, reducing your income and your tax bill at the same time.
- Owning a business and recognizing a loss
If you run a business, a loss can reduce your taxable income. Now, the goal is to eventually make money, of course, but in the early years or with big investments, strategic end of year planning, losses can offset your other ordinary income.
- Rental real estate losses
This one comes with a web of rules (material participation, income limits, real estate professional status, which I won’t be going into in this post).
But for some, rental properties can create paper losses on their tax return (often from depreciation) that offset other income in the current year (or they’ll be carried forward to future years if not utilized in the current year.)
- Tax loss harvesting
In your taxable investment accounts, if the market takes a dip and you sell investments at a loss, you can use those losses to offset gains. BUT even if you don’t have gains, you can deduct up to $3,000 of losses each year against ordinary income. Of course, the goal isn’t to lose money, that never feels great…but if the market is volatile, at least you can use it to your tax advantage.
Layer 2: Itemized Deductions
Once your AGI is set, you get to then subtract either the standard deduction or itemize. Many people default to the standard deduction because it’s simple and they don’t have enough itemized deductions that exceed their standard deduction.
But if your itemized deductions add up to more than the standard deduction, you’ll continue to drive down your taxable income and thus, your tax bill.
Itemized deductions can include things like (but not limited to):
- Mortgage interest
- State and local taxes
- Real estate taxes
- Charitable contributions
And here’s where I often see people surprised…in the past, writing a check to charity does reduce your taxable income, but only if you itemize and only if those deductions exceeded your standard deduction. Otherwise, it’s generous (and still worth doing!) but it didn’t shift your tax return.
One thing that DID change with the One Big Beautiful Bill Act is that starting in 2026, a deduction will be allowed for people who are NOT itemizing for cash donations to charity up to $1,000 for single filers or $2,000 for married couples filing jointly.
Layer 3: Tax credits
Credits are a step further because they may reduce your tax bill dollar for dollar. Some of the most common include:
- The Child Tax Credit
- The Child and Dependent Care Credit (for childcare expenses)
- The American Opportunity and Lifetime Learning Credits (for education costs)
- The Saver’s Credit (if you’re contributing to retirement and meet income limits)
- Energy credits for tax efficient property spending (solar panels, heat pumps, etc.)
Unlike deductions, credits don’t just lower your taxable income, many directly cut what you owe, dollar for dollar.
Why this matters right now
This is where I need to bring you back to the real point: most of these opportunities to save on taxes happen during the year, not after it. You don’t magically discover them when you file. You create them through the choices you make with your money.
And here’s the part I really want you to hear, saving on taxes isn’t about cutting corners. It’s about aligning your money with the things you already say matter like retirement, healthcare, your kids, your home, your future.
If you want to retire comfortably? Start contributing meaningfully now. Those dollars not only grow for your future but can also give you a deduction today.
If you want to stay ahead of rising healthcare costs or perhaps retire early without the fear of medical expenses? Use tax advantaged accounts like HSAs and FSAs to cover expenses while reducing your taxable income.
If you’re building a business? Thoughtful investments and expenses can lower your AGI today while positioning you for growth tomorrow.
If you’re raising kids? From childcare expenses to education savings, there are credits and deductions designed to support your family financially while easing your tax bill.
If you want to invest in real estate? Understand the nuances around the tax rules and how you can benefit today AND tomorrow with this cash flowing asset class.
If you’re investing for the long run? Managing gains and losses with intention can protect your portfolio and your tax burden.
No Shortcuts, Only Strategy
There’s no secret loophole. No magic CPA button.
Instead, there are strategies. And they all require you to direct your money with intention. Retirement, healthcare, kids, your home, your future investments, those are the levers that reduce taxes and build wealth at the same time.
Your tax return is simply the reflection of how you’ve chosen to spend, save, and invest.
My Challenge to You
Stop thinking of taxes as something you “deal with” in April.
Start looking at tax planning as part of your everyday financial life. Because when you do, you stop scrambling for last minute deductions and start using your money with purpose AND keep more money in your pocket and not Uncle Sam’s.
The result? Less stress, more savings, and more opportunities to build wealth on your terms.
Next Step: Put Tax Planning Into Action
Don’t let another year pass where tax season catches you off guard. The earlier you start, the more options you have.
Schedule an exploratory Tax Planning Session today and let’s build a strategy that keeps more money in your pocket this year and for years to come.
