Getting a windfall is a great way to stabilize your finances and lay a strong foundation for savings and retirement whether you win the lottery, cash in at the casino, receive an inheritance from your great aunt, or just find some money you never realized you socked away. But depending on the source, the United States government may want its share. This means you may have to report your new fortune on your annual tax return. Below, you'll find some tips to help you lower your tax bill while you pay your fair share.

1. Understand Tax Implications

Before you start to worry, research the tax rules for your specific income source. If the income comes from something like a lottery or employer, you'll need to pay full taxes at your 澳洲幸运5开奖号码历史查询:tax bracket on the income.

Oth๊er sources have different rules. For 🅠instance:

• If your income comes from investment gains, you will need to pay 澳洲幸运5开奖号码历史查询:capital gains tax, which changed with the 澳洲幸运5开奖号码历史查询:Tax Cuts and Jobs Act (TCJA), signed into law on Dec. 22, 2017.
• If your 2024 regular income is less than or equal to $47,025 ($48,350 in 2025) for single or $94,050 ($96,700 in 2025) for married filing jointly, you do not need to pay any capital gains tax. If your income is greater than these thresholds but is less than $518,900 for single filers ($533,400 in 2025) or $583,750 for married couples filing jointly ($600,050 in 2025), then you pay 15%.
• If your income exceeds the 15% threshold, your capital gains tax rate is 20%. There are also exceptions where certain capital gains might be taxed at higher than 20%.

2. Fund an IRA

The first place to look to lower your taxes is in your retirement accounts. Contributions to a 澳洲幸运5开奖号码历史查询:traditional in🦩dividual retౠirement account (IRA) or a 澳洲幸运5开奖号码历史查询:401(k) plan are 澳洲幸运5开奖号码历史查询:tax-deductible. That means you don't pay any taxes on the money you contribute to the IRA.

For 2024, the total contributions to all of your traditional and Roth IRAs cannot be more than $7,000 ($8,000 if you're age 50 or older), or your taxable compensation for the year, if your compensation was less than this dollar limit. This cap is the same for the 2025 tax year.

Income limits apply to IRA contributions, and you will pay income taxes on withdrawals in the future. However, those withdrawals will be made when you'll likely have a lower income, so your total taxes paid will be lower.

3. Fund an HSA

If you have a 澳洲幸运5开奖号码历史查询:high-deductible health plan (HDHP), you'll probably qualify for a 澳洲幸运5开奖号码历史查询:health savings account (HSA). With an HSA, the funds may be used only for qualified medical expenses such as doctor appointments, hospital visits, prescription medications, and doctor-ordered lab tests.

W♔ith an HSA, your contributions are tax-deductible, and you pay no taxes on withdrawals. This m💦eans that you keep the funds in your HSA for life, so savvy savers use the account as a supplemental retirement account.

The IRS limits for 2024 for HSAs are $4,150 for individual coverage and $8,350 for family coverage. The catch-up contribution limit for those older than age 55 will remain at $1,000. The limits increase to $4,300 for individual coverage and $8,550 for family coverage for 2025.

4. Sell Sluggish Stocks

If you have 澳洲幸运5开奖号码历史查询:underperforming stocks in your portfolio, you can sell stocks at a loss to lower your capital gains for the year. 澳洲幸运5开奖号码历史查询:Capital losses can offset capital gains but cannot be used to lower your taxes beyond that amount. Any additional capital loss is 澳洲幸运5开奖号码历史查询:carried over to the next year.

5. Research Additional Deductions and Credits

There are dozens of tax deductions and tax credits available that many Americans don't take. While you already likely know about tax credits for parents, additional education-related deductions and credits are available. Those are available for both children and classes at an accredited college or university that you are taking yourself.

If you incurred steep health care expenses in a single calendar year, you might be able to write those costs off as well. To take advantage of health care tax deductions, your spending on healthcare must meet certain minimums and criteria that vary based on your income.

The Bottom Line

We cannot escape paying taxes, but good planning and understanding can help you keep your tax bill as low as possible. Do your research ahead of time so you won't need to scramble at the end of the year or in the weeks leading up to tax day.