Tax Tips That Saved Me Thousands (And They're Stupidly Simple)

I owed $2,200 to the IRS last April. Sat at my kitchen table staring at the number on my screen like it had personally insulted me. I'd done everything through TurboTax, clicked through the prompts like a good little taxpayer, hit submit, and there it was. Twenty-two hundred dollars. Due in three weeks. Happy spring.

So I did what any rational adult does when they receive bad financial news: I called my friend Dave, who works in accounting, and complained for forty-five minutes.

Dave listened patiently. Then he asked me three questions. Was I maxing out my 401k? Did I have an HSA? Had I looked at my investment losses from last year?

No, no, and what?

Dave sighed the sigh of a man who has watched his friends set money on fire for years. Then he walked me through a handful of things that, had I known about them twelve months earlier, would have saved me well over $3,000. Not through some complicated offshore scheme. Not through anything remotely shady. Just through basic, boring tax moves that apparently every financially literate person already knows and nobody bothered to mention to the rest of us.

I'm still a little bitter about it. But at least now I can pass it along.

Your 401k Is a Tax Cheat Code (and You're Probably Not Using It Right)

Most people with a 401k through work contribute enough to get the employer match and then stop. I get it. That's what I did. My company matched up to 4%, so I contributed 4%, collected my free money, and felt like a financial genius.

Here's what I didn't understand: every dollar you contribute to a traditional 401k reduces your taxable income by that same dollar. If you make $85,000 and contribute$10,000 to your 401k, the IRS treats you like you only made $75,000. You're not paying taxes on that$10,000 right now. It grows tax-free until you retire and withdraw it, at which point you'll hopefully be in a lower tax bracket.

The contribution limit for 2026 is $23,500 if you're under 50. Most people contribute nowhere near that. I was putting in about$6,800 — just enough for the match. After talking to Dave, I bumped it to $15,000. That moved me from the 22$1,800 in the first year.

Yes, that's less take-home pay per paycheck. I felt it. But I also adjusted faster than I expected, because — and this is a weird psychological truth — you don't miss money you never see. It goes straight from your paycheck into the 401k before you can spend it on another pair of sneakers you don't need. If you're already investing even a little bit, increasing your 401k contribution is probably the single highest-impact move you can make at tax time.

And if your employer offers a Roth 401k option, that's a different calculation. Roth contributions are after-tax, so you don't get the deduction now, but the money grows completely tax-free forever. If you think you'll be in a higher tax bracket in retirement — maybe you're early in your career and expect your income to climb — Roth might make more sense. Either way, contributing more than just the match is the move.

The HSA: The Most Overpowered Account Nobody Talks About

If you have a high-deductible health plan (HDHP) through work or on your own, you're eligible for a Health Savings Account. And honestly, the HSA might be the most absurdly tax-advantaged account in existence. I didn't open one until Dave yelled at me about it. I'm using "yelled" loosely, but there was a firmness in his voice.

Here's what makes the HSA ridiculous: contributions are tax-deductible (like a 401k), the money grows tax-free (like a Roth IRA), and withdrawals for qualified medical expenses are also tax-free. That's a triple tax advantage. No other account does all three. The IRS basically looked at this thing, shrugged, and said "sure, why not."

For 2026, you can contribute up to $4,300 as an individual or$8,550 for a family. I maxed out the individual limit. That's $4,300 knocked off my taxable income right there. At a 22$946 in federal taxes alone, plus state taxes on top of that.

But here's the real power move, and this is the part that blew my mind: you don't have to spend the HSA money on medical expenses right now. You can invest it — most HSA providers let you put the money into index funds just like a brokerage account — and let it grow for decades. Then, when you're 65 or older, you can withdraw it for any reason (not just medical) and just pay regular income tax on it, like a traditional IRA. Or you can withdraw it tax-free for medical expenses at any point, even if the expense happened years ago, as long as you keep the receipt.

So the real strategy is: pay for medical expenses out of pocket now, let your HSA grow invested for years, and then reimburse yourself later. Tax-free growth, tax-free withdrawal. It's legal. It's intended. And almost nobody does it because nobody explains it properly.

Tax-Loss Harvesting: Sounds Complicated, Takes Ten Minutes

This is the one that sounded the most intimidating to me, and turned out to be the simplest once Dave explained it.

Tax-loss harvesting means selling investments that have lost value to offset the gains from investments that made money. You lost $3,000 on that tech stock that cratered? Great — you can use that$3,000 loss to cancel out $3,000 in gains from other investments, so you don't pay taxes on those gains. And if your losses exceed your gains, you can deduct up to$3,000 of those excess losses against your regular income per year. Anything beyond that carries forward to future years.

I had a position in an international fund that was down about $4,500. It had been sitting there, red, making me feel bad every time I opened my brokerage app. I sold it, used$1,200 of the loss to offset some gains I'd realized earlier in the year, and deducted the remaining $3,000 against my income. At the 22$660 in tax savings. From selling something I didn't even want anymore.

The one rule you need to know: the wash sale rule. You can't sell an investment at a loss and then buy the same or a "substantially identical" investment within 30 days before or after the sale. The IRS isn't stupid — they know people would sell and immediately rebuy just for the tax benefit. So if you sell your S&P 500 fund at a loss, wait 31 days before buying it back. Or buy a different but similar fund immediately (like switching from one S&P 500 ETF to another company's total market fund). That's allowed.

A lot of robo-advisors like Betterment and Wealthfront do this automatically. If you're managing your own portfolio, just check for losing positions in November or December each year and decide if harvesting makes sense. It's free money from Uncle Sam. Well, it's technically your money that Uncle Sam was going to take. Same thing.

Deductions You're Probably Missing

Beyond the big three — 401k, HSA, tax-loss harvesting — there are a handful of deductions that regular people miss all the time because nobody tells them to look:

Student loan interest. You can deduct up to $2,500 in student loan interest even if you take the standard deduction. This is an "above the line" deduction, which means you get it regardless. If you're paying student loans and not claiming this, you're overpaying your taxes right now.

State and local taxes (SALT). If you itemize, you can deduct up to $10,000 in state income taxes and property taxes combined. For people in high-tax states like California, New York, or New Jersey, this can be significant.

Home office deduction. If you're self-employed or freelance — even on the side — and you use a dedicated space in your home regularly and exclusively for work, you can deduct it. The simplified method lets you deduct $5 per square foot, up to 300 square feet. That's up to$1,500 for having a desk in a spare bedroom. This doesn't apply to W-2 employees working remotely, unfortunately. Only self-employed folks.

Charitable donations. You probably know about this one, but did you know you can deduct the fair market value of donated items? That bag of clothes you dropped at Goodwill? Keep the receipt and list it. That old couch you gave away? Deductible. It adds up faster than you'd think. I claimed about $800 in non-cash donations last year that I almost didn't bother documenting.

IRA contributions. If you don't have a 401k through work, contributions to a traditional IRA are fully deductible up to $7,000 for 2026. Even if you do have a 401k, you might still get a partial deduction depending on your income. Check the IRS phase-out tables — it takes two minutes.

TurboTax vs. an Actual Human Accountant

I used TurboTax for years. It's fine. For a straightforward W-2 situation with standard deductions, it does exactly what it needs to do, and the free and mid-tier versions are perfectly adequate.

But here's where it falls short: TurboTax doesn't tell you what you should be doing differently. It processes what already happened. It asks "did you contribute to an HSA?" It doesn't say "hey, you should open an HSA because you're eligible and it would save you $900." It fills out your return. It doesn't give you a strategy.

After my $2,200 wake-up call, I paid a CPA$400 to review my situation. Not just to file my return — I still did that myself — but to sit down with me for an hour and tell me where I was leaving money on the table. The $400 I spent on that meeting saved me over$3,000 in the following year's tax bill. That's an 8x return. I'd take that investment every single day.

My general rule now: if your tax situation is simple — one job, no side income, standard deduction, no investments beyond a basic 401k — use software. TurboTax, FreeTaxUSA, whatever. You're fine.

If you have any of the following, at least consult a CPA once: self-employment income, rental property, stock options or RSUs, investment accounts you're actively managing, a recent marriage or divorce, or income over $150k. You don't need to hire them every year. One strategic session can set you up for years.

And for the love of your wallet, don't go to one of those tax prep chains where a person with two weeks of training fills out your return. You're better off with software than with a seasonal employee clicking through the same prompts you'd click through yourself.

The Biggest Mistakes I See People Make

Not adjusting your W-4. If you're getting a massive refund every year, you've given the government an interest-free loan. That $3,000 refund means you overpaid by$250 every month. That's money that could have been in your 401k, your HSA, or working on your financial goals all year. Adjust your W-4 so your withholding is closer to what you actually owe. Use the IRS withholding estimator — it's free and takes maybe fifteen minutes.

Forgetting to contribute to retirement accounts before the deadline. You have until April 15 to make IRA contributions for the previous tax year. A lot of people don't realize this. If it's March and you haven't maxed out your IRA, you still have time. This applies to HSAs too.

Not keeping records of deductible expenses. I started a dead-simple spreadsheet — date, amount, category, receipt photo — for anything potentially deductible. Charitable donations, business expenses, medical bills. It takes thirty seconds per entry throughout the year and saves hours of scrambling in April. Past-me hated keeping records. Present-me loves past-me for starting.

Ignoring state-specific deductions and credits. Federal taxes get all the attention, but your state might offer credits for things like energy-efficient home improvements, education expenses, or contributions to 529 plans. Every state is different. Spend ten minutes googling "[your state] tax deductions" once a year. You'll almost certainly find something you didn't know about.

Filing late or not filing at all. If you owe money and file late, the penalty is 5% of the unpaid amount per month, up to 25%. If you can't pay, file anyway and set up a payment plan. The IRS is surprisingly reasonable about payment plans. What they're not reasonable about is people who just... don't file. Don't be that guy.

The Bottom Line (Pun Absolutely Intended)

Here's my total tax savings from one year of actually paying attention, broken down roughly:

• Increased 401k contributions: ~$1,800 in tax savings
• HSA contributions: ~$946
• Tax-loss harvesting: ~$660
• Misc deductions I'd been missing: ~$400
• W-4 adjustment (money back in my paycheck monthly): ~$200/month

Total: roughly $4,000 in the first year, plus better cash flow every month from the W-4 fix.

None of this required an accounting degree. None of it was risky or aggressive. I didn't set up an LLC in Wyoming or hide money in crypto. I just did the boring, legal, completely normal things that the tax code literally encourages you to do, and that most people skip because they sound complicated or because nobody explained them in plain English.

The tax code is not your enemy. It's a rule book, and like any rule book, the people who actually read it — or at least skim the important parts — do better than the people who don't. You don't need to become a tax expert. You need to spend one Saturday afternoon understanding five or six concepts, make a few adjustments, and then mostly forget about it until next year.

That $2,200 I owed the IRS? This year I'm getting a$340 refund. I would have preferred to break exactly even — a big refund means I've given the government too much — but I'll take the swing from negative twenty-two hundred to positive three-forty. That's a $2,540 turnaround from doing nothing clever. Just doing the obvious stuff that was always available to me.

Dave says I still have room to optimize. He's probably right. But I've decided that the man has given me enough free accounting advice over beers, and if he suggests one more tax strategy I'm going to have to start paying his hourly rate.

Which, to be fair, would probably be deductible.