It is the single most common question that all Glendale income tax preparers get: How can you lower my taxes? A knowledgeable tax preparer will have a good understanding of tax law and how you can lower your tax bill based on that law. In the broadest terms, the two main ways you can reduce your tax liability are deductions and credits.
Tax Deductions
There are two types of deductions that can lower your adjusted gross income (AGI), which will, in turn, lower your tax liability:
- Standard Deduction vs Personal Itemized Deductions
The first type of deduction available to you is not related to any kind of business or work expenses. Everyone, regardless of whether they are a full-time employee receiving a W-2 form or a self-employed worker who receives 1099-NECs, gets to take either the standard deduction or personalized itemized deductions. You cannot take both.
If you do not have any eligible personal itemized deductions that you can take, or they do not add up to more than the standard deduction for your filing status, you will have to take the standard deduction. For example, if your filing status is single for 2025 and you do not have personal itemized deductions over the standard deduction of $15,750, you will deduct $15,750 from your AGI.
Personal itemized deductions that you may be eligible for include: state and local taxes, mortgage interest, property taxes, charitable contributions, and/or unreimbursed medical expenses over 7.5% of your AGI. If you’re filing single, and these add up to more than the standard deduction of $15,750, then you can deduct that amount instead from your AGI.
- Work-Related Deductions
Here is where the confusion tends to set in. If you are eligible for any work-related deductions from your income, these are separate from the standard or personal itemized deductions. The only work-related deductions that can be taken on your federal tax return are those related to self-employed income. In other words, if you received a 1099-NEC, a 1099-K, or have self-reported income, you can take business-related expenses to reduce that self-employed income. If, on the other hand, your income gets reported on a W-2 tax form, whether you consider yourself freelance or not, you cannot take any business or work-related expenses, even if you work from home.
**If you swear you’ve taken work-related expenses as personal itemized deductions in the past, you might have--prior to 2017 when the tax law changed. OR, as a resident of Glendale, CA, you may still be able to take some of those personal work-related deductions on your California state tax return, but they must add up to over 2% of your AGI.
For a quick guide to these tax deductions, please check out our Tax Deduction Quick Guide.
Tax Credits
Once you’ve taken all of the deductions you can from your income, you will have your taxable income, which determines your tax bracket and how much money you may owe. If you do owe, there are still ways to lower that tax bill. While deductions lower your income, tax credits lower the amount you owe or can increase your refund.
- Refundable Tax Credits
A refundable tax credit can be used to lower your tax bill. If you are receiving a refund instead of owing in any given year, this type of tax credit can also increase the amount of that refund. Tax credits that are, at least partially, refundable include the Earned Income Tax Credit, the Additional Child Tax Credit, the American Opportunity Tax Credit, and the Premium Tax Credit.
- Non-Refundable Tax Credits
These credits can lower your tax bill, but if your tax bill drops to $0 or you are getting a refund, these credits cannot be added to your refund. These credits include the Foreign Tax Credit, the Child Tax Credit, the Child and Dependent Care Credit, the Lifetime Learning Credit, and the Retirement Savings Credit.
Are There Other Ways to Lower Your Tax Bill?
There may be deductions or credits that are not listed above as these lists are not exhaustive and tax law is always changing, but there are no secret or magic ways to lower your tax bill. Every taxpayer’s situation is different, so while your sister or colleague may tell you about a new great deduction they’re taking, it may not apply to your situation (or they may be exaggerating). It’s always best to talk to a reliable Glendale income tax preparer.
Moore & Paquette Tax Group is here to help you lower your tax bill. We can do your taxes whether you live in Glendale, CA, or another country—yes, really! If you’d like to learn more about us, please reach out today.
**Please note that tax law can change often, and the above should not be considered legal advice. Always consult with a tax preparer before completing a tax return.