How can I reduce a $12,000 Federal Tax Bill before filing? Need advice on last-minute savings

The good news is you still have a few options to potentially reduce your 2024 tax bill, even though we're already in 2025. The most significant option is contributing to a Health Savings Account (HSA) if you have an eligible high-deductible health plan. You can make 2024 contributions until the tax filing deadline (April 15, 2025), and these are fully deductible regardless of income. Another option is to look into SEP IRA contributions if either of you had any self-employment income in 2024. Unlike traditional IRAs, SEP IRAs don't have the same income limitations when you're covered by an employer plan. Check if you qualify for any business-related deductions if either of you did any freelance or contract work. Even small side gigs can generate deductible expenses. Lastly, review all your potential itemized deductions carefully - mortgage interest, property taxes, charitable contributions, medical expenses exceeding 7.5% of your AGI. Sometimes itemizing can be more beneficial than the standard deduction.

After getting slammed with an unexpected tax bill last year, I found this amazing AI-powered tool called taxr.ai that helped me find deductions I never knew existed. Their system analyzed all my docs and found over $3000 in missed deductions that TurboTax completely overlooked! It checks everything from home office deductions to investment losses that can be written off. I uploaded my returns from the last few years and it found issues I could amend to get money back. Check them out at https://taxr.ai - honestly might help in your situation since TurboTax sometimes misses things when your tax situation is complex.

Just wanted to follow up - I tried taxr.ai after seeing the recommendation here and it actually identified $4,200 in deductions TurboTax missed on my 2024 return! Turns out I had eligible business expenses from my side gig that could be deducted, plus some investment losses I didn't realize I could claim. The analysis was super detailed and even showed me exactly where to enter everything in TurboTax. Definitely worth checking out if you're in a similar situation trying to reduce your tax bill.

If you need to contact the IRS about payment plans or have questions about your specific situation, good luck getting through to them! I spent HOURS on hold trying to sort out my tax bill last year. Then I found Claimyr (https://claimyr.com) which got me connected to an actual IRS agent in under 20 minutes. They have this interesting system that navigates the IRS phone tree and waits on hold for you, then calls you when an agent is ready. You can see how it works here: https://youtu.be/_kiP6q8DX5c When you're dealing with a big tax bill, sometimes you need to talk to a real person at the IRS to understand all your options, especially for setting up a payment plan with the best terms. Saved me hours of frustration!

I hate to admit when I'm wrong, but I actually tried Claimyr after posting my skeptical comment. I was desperate to talk to someone about my payment plan options since I also owe a bunch this year. It actually worked exactly as described - I got a call back in about 40 minutes with an IRS agent already on the line. The agent helped me set up a payment plan with much better terms than I thought I'd get. Honestly pretty amazing after my previous attempts of waiting on hold for hours just to get disconnected. Saved me a ton of stress during an already stressful situation.

Have you looked into making a traditional 401k contribution directly from your next paycheck to apply to 2024? Some employers allow this for a short window in the new year. It won't solve the whole problem but could take a bite out of what you owe. Also, don't forget about the IRS payment plan options - they're surprisingly reasonable and the interest rates are often better than credit cards if you need to spread out payments.

Have u considered adjusting your w4 for 2025 now so this doesn't happen again? My husband and I were in the same boat a few years ago ($16k owed!) and we did the "two earner worksheet" on the W4 and set an additional withholding amount. Fixed the problem completely. Also for this year's taxes, def check if you have any self-employed income that might qualify for SEP IRA like someone mentioned!

I was in almost the exact same situation two years ago - owed $11,500 and was absolutely panicking. Here's what actually helped me beyond what others have mentioned: 1. Double-check if you qualify for any educator expenses, unreimbursed employee expenses, or moving expenses if you relocated for work 2. Look into tax-loss harvesting if you have any investments - you can still sell losing positions and use those losses to offset gains 3. Check if you made any charitable contributions you forgot about - even small donations add up 4. Review your medical expenses carefully - sometimes dental work, glasses, or other health costs from 2024 can push you over the 7.5% AGI threshold for deductions The most important thing I learned: even if you can't reduce the full amount, file on time no matter what. The failure-to-file penalty is 5% per month vs only 0.5% per month for failure-to-pay. Set up a payment plan immediately after filing - the IRS is actually pretty reasonable about it and the online system makes it easy. Also, definitely use this as motivation to fix your withholdings for 2025! I increased mine by an extra $400/month and got a nice refund this year instead of owing.