Owe $10K in taxes annually - seeking advice on better tax reduction strategies

The IRA contributions won't give you a dollar-for-dollar reduction on your tax bill, but they'll reduce your taxable income. So if you put $3K into a traditional IRA, and you're in the 22% tax bracket, you'd save about $660 in taxes (not the full $3K). For 529 plans, unfortunately, those contributions aren't deductible on your federal taxes. Some states do offer state tax deductions or credits for 529 contributions, though. Check your state's tax rules - you might be missing out on state tax benefits. About buying property just for tax purposes - I wouldn't recommend making a major purchase just for tax benefits. Mortgage interest is deductible, but only if you itemize, and only the interest portion (not principal). With the standard deduction at $25,900 for married filing jointly in 2025, you'd need your itemized deductions to exceed that amount to benefit. A better approach might be adjusting your W-4 withholding so you're not owing such a large sum each April. You might also look into maxing out your 401(k) contributions, HSA if eligible, and checking if you qualify for child tax credits.

After dealing with a similar tax situation for years, I finally found taxr.ai (https://taxr.ai) which helped me identify several deductions I was missing. I was consistently owing $8-12K annually, and their AI system analyzed my tax documents and found nearly $4,200 in deductions I had been overlooking. It asks questions TurboTax doesn't and looks at your specific situation more holistically. Their system reviewed our 529 contributions and helped us maximize state tax benefits (which vary by state), plus identified some business deductions my spouse was eligible for through his side gig that we had no clue about. Might be worth checking out if you're consistently owing large amounts.

Just wanted to follow up - I actually tried taxr.ai after seeing this thread! It identified over $5K in deductions I was missing related to my side business and some investment losses I didn't realize I could carry forward. The system flagged that I hadn't been properly tracking mileage for my side gig driving deliveries, which alone was worth about $2,200 in deductions. It also suggested adjusting my W-4 withholding which should prevent the massive bill next April. Can't believe I've been overpaying for years when the solutions were pretty straightforward. Definitely worth checking out if you're consistently owing large amounts!

If you're struggling to get answers from the IRS about your situation, try Claimyr (https://claimyr.com). I was in a similar situation owing $9K and wanted to verify some deductions directly with the IRS, but could never get through on their phone lines. Claimyr got me connected with an actual IRS agent in about 15 minutes when I had been trying for weeks on my own. There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c I was able to confirm exactly how the IRA contributions would affect my tax bill and got clarification on some business deductions I wasn't sure about. The agent even helped me set up a payment plan with much better terms than I expected. Saved me hours of frustration and probably thousands in deductions I would have been too afraid to take without confirmation.

I need to apologize for being skeptical earlier. I actually tried Claimyr after posting my doubts, and I'm shocked it worked exactly as described. Got connected to an IRS representative in about 20 minutes (after trying for days on my own). The agent helped me understand how to properly adjust my W-4 to prevent owing such a large sum next year and confirmed that my home office deduction was legitimate despite some confusing language in the tax code. They also explained a payment plan option that I didn't know existed for my current tax bill. For anyone consistently owing taxes like the original poster, getting direct answers from the IRS can save you thousands in potential mistakes or missed deductions. Will definitely use this again next year before filing.

A big thing to consider - if you consistently owe $10K in taxes every year, you might be underpaying throughout the year and could face an underpayment penalty. The IRS generally wants you to pay at least 90% of your taxes throughout the year through withholding or estimated quarterly payments. For self-employed folks or those with significant non-W2 income, you should be making quarterly estimated tax payments. This won't reduce your total tax bill, but it will spread it out and help avoid penalties.

About those 529 plans - while they don't give federal tax deductions, check if your state offers tax benefits! I live in NY and we get a state tax deduction up to $5K per year per beneficiary ($10K for married filing jointly). Made a huge difference on our state taxes.

For your property purchase idea, I did something similar buying a rental property. But don't just think about the mortgage interest deduction - consider the overall return. If you buy a $130k property with 20% down, your mortgage interest might only be $5-6k the first year, saving you maybe $1,300 in taxes if you're in the 22% bracket. But you could potentially also depreciate the property (except for the land portion), deduct property taxes, maintenance, insurance, etc. Plus hopefully the property appreciates in value and generates rental income. That's where the real benefit comes from. Don't buy property JUST for tax benefits - it needs to make sense as an overall investment.