Section 01 of 04
What are practical ways to decrease taxable income?
You can lower it through payroll elections and specific deductions that apply to your distinct situation.
Move | Who it can fit | Why it works |
Traditional workplace retirement deferrals like a 401(k) | Employees with an eligible plan | Elective deferrals are generally not taxed — until distribution |
Health Savings Account contributions | People covered by a qualifying high-deductible health plan | Individual contributions are generally deductible — even without itemizing |
Health FSA or dependent care FSA elections | Workers whose employer offers a cafeteria plan | Salary-reduction contributions generally aren’t treated as wages for federal income tax |
Above-the-line deductions examples: specific IRA deductions & student loan interest | Filers who satisfy qualifications for the specific rules | These lower income before the standard vs itemized decision. |
Ordinary and necessary business expenses | Self-employed individuals & many small business owners | Deductible costs should be ordinary & necessary for the trade or business |
Section 02 of 04
What steps should you take to apply this?
Taxpayers get the biggest payoff by taking actions early and having professional paperwork.
- Pull the most recent pay stub & confirm which elections still allow changes
- Set a monthly target that complies with the cash flow
- Store proof in one folder. Such proof covers plan statements and Forms W-2/1099 as well as dated receipts
Who is writing this
Guidance from a firm that files these every season
Wasserman Accounting has advised New Jersey individuals and businesses since 1993. The positions in this article are the ones we take on real returns.
Since 1993
30+ years in practice
3,054
Clients served
10,000+
Returns completed
All 50
States licensed
Section 03 of 04
Does New Jersey follow the same rules as the IRS?
Not always — New Jersey’s Gross Income Tax has its own deductions. Therefore, the federal result might not mirror your NJ return.
- Unreimbursed medical expenses are generally deductible — only for the portion over 2% of New Jersey gross income.
- New Jersey’s Gross Income Tax does not present a charitable contribution deduction.
Section 04 of 04
Wasserman Accounting CPAs Stands Ready For Assistance
Contact us today to review your pay setup and confirm what applies to the federal and New Jersey filings. Our team can outline the next actions for full compliance.
