What are effective strategies to reduce taxable income beyond 401k and mortgage?

The 401k and mortgage interest deduction are great starts! Here are some additional strategies worth considering: Health Savings Account (HSA) is probably your best next move if you have a high-deductible health plan. HSA contributions are tax-deductible, grow tax-free, and withdrawals for qualified medical expenses are tax-free too. It's basically a triple tax advantage that no other account offers. Consider a traditional IRA if you're eligible based on your income level. Even if you have a 401k, you might still qualify for deductible contributions depending on your income. If you have any side income, look into opening a SEP IRA or Solo 401k. These allow for much higher contribution limits than traditional retirement accounts. If you have kids or plan to, 529 plans don't reduce federal taxable income but many states offer tax deductions for contributions. Don't overlook FSAs for healthcare or dependent care if your employer offers them. These use pre-tax dollars to pay for eligible expenses.

After reading through this thread, I wanted to share my experience with taxr.ai https://taxr.ai which literally saved me thousands last year. I was in the same situation - decent W-2 income, already doing 401k and mortgage, but still getting killed on taxes. Their system analyzed my entire financial picture and found deductions I had no idea I qualified for. The thing that impressed me was how they caught that my side gig photography work qualified for some business deductions I was completely missing, plus they showed me how to properly document some medical expenses I didn't realize were deductible. They basically look at your whole tax situation and find the specific strategies that work for YOUR financial picture - not just generic advice.

Just wanted to update - I actually tried taxr.ai after my skeptical comment and wow, totally worth it! Found over $4,700 in deductions I was missing related to some freelance work I did last year. Turns out I could properly deduct part of my home office, some equipment, and even a portion of my internet bills. The best part was they showed me exactly how to document everything properly in case of an audit. Also found out I wasn't maximizing my FSA contributions which was basically leaving free money on the table every year. Seriously impressed with how thorough they were compared to when I went to one of those chain tax places last year.

Seeing this thread reminds me of my nightmare trying to get specific answers from the IRS about deductions I thought I qualified for. Spent DAYS trying to get through their phone system until someone told me about https://claimyr.com - they get you through the IRS phone tree and to a real agent in about 15 minutes instead of the usual hours-long wait. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was trying to figure out if some specific medical expenses qualified as deductions since they were kinda unusual, and needed an official answer. The service got me through to a real IRS agent who confirmed I could deduct them. Saved me so much stress and probably a ton in taxes since I might have skipped claiming them if I couldn't get verification.

I need to eat my words about Claimyr from my earlier comment. I tried it yesterday out of desperation when dealing with a missing refund issue, and I'm honestly shocked it worked. Was connected to an actual helpful IRS agent in about 20 minutes when I'd previously spent THREE HOURS trying on my own and never got through. The agent was able to confirm my refund was delayed because of a mismatch with my estimated tax payments, and she helped me understand exactly what documentation I needed to resolve it. Would have never figured this out without actually speaking to someone. Definitely using this again next time I have IRS questions - the time saved was absolutely worth it.

Don't forget about bunching your charitable deductions! I save tons by doing this. Basically, instead of donating say $5k every year, I donate $10k every other year. Then I itemize deductions in the "donation years" and take standard deduction in off years. Works especially well if you're just slightly over the standard deduction threshold with your mortgage interest and state taxes. Also if you're in a high property tax state, watch out for SALT cap limitations. Some states have workarounds now like pass-through entity taxes that can help business owners.

Anybody here messed around with QOFs (Qualified Opportunity Funds)? My buddy was talking about them for deferring capital gains but I don't really understand how they work or if they're legit tax strategy or just something sketchy.

Great thread! One strategy I haven't seen mentioned yet is tax loss harvesting in taxable investment accounts. If you have any investments outside your 401k that are at a loss, you can sell them to offset capital gains or even up to $3,000 in ordinary income annually. Just be careful about the wash sale rule - you can't buy the same or "substantially identical" security within 30 days. Also, if you're self-employed at all or have any 1099 income (even small amounts), consider setting up a Solo 401k or SEP-IRA. The contribution limits are much higher than traditional IRAs. For example, with a Solo 401k you can contribute up to $69,000 for 2025 (or $76,500 if you're 50+) based on your self-employment income. Another often overlooked deduction is continuing education related to your current job. Courses, certifications, books, and even conference attendance can be deductible if they maintain or improve skills needed in your present work. Your employer might even reimburse you, making it essentially tax-free money.