p>Apart from contributing money to a retirement plan, the next best way to reduce income tax liability is through tax deductions and tax credits.</p><p>One of the most popular forms of tax deduction comes from charitable contributions. Donating money, cars, art, investments or other things to qualified charitable organizations can all reduce taxable income. Arizona provides two separate tax credits for individuals who make charitable donations, one for donating to Qualified Charitable Organizations and another for donations to Qualifying Foster Care Charitable Organizations. Your donation can reduce dollar-for-dollar what you owe in state income tax up to $400 if you are filing individually. For more information about how donating can help you save on your taxes or to find qualified charitable organizations visit https://azdor.gov/tax-credits and https://www.flagstafftaxcredit.org/donate. This is, of course, only one of the many different possibilities when it comes to tax deductions or credits.</p><p>Some other options include adoption credits for the cost of adopting a child, property tax deduction, and&#8211; if you work from home&#8211; a portion of the money you spend on mortgages, property taxes, utilities, and similar expenses can be written off as home office expenses. More recently, business owners have been approved deductibles on property modifications or property purchases made to help prevent the spread of COVID-19. These are just some of the hundreds of deductibles and credits offered that you can take advantage of to lower your tax liability.</p