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Gas prices hit new highs in 2022. And while they’ve fallen since that spike, the government expects prices to drop even more in 2025 and 2026. Keep reading to learn more about historical gas prices, get a sense of how things have changed over time, and learn tips for finding cheap gas in your area.

Why Gas Prices Are Falling in 2025

As anyone who’s gone to the pump in the past couple of years knows, filling up isn’t as cheap as it used to be. Gas prices rose in the second half of 2023, due in large part to a drop in global oil production. And though they fell somewhat in 2024, they remained stubbornly higher than before the pandemic.

Thankfully for drivers, gas prices are expected to drop even more in 2025 and 2026, as crude oil prices are projected to fall. According to the U.S. Energy Information Administration (EIA), prices at the pump will average around $3.20 per gallon in 2025, a decrease of more than 11 cents per gallon from 2024. The annual average price of gas is expected to drop even more — to $3.00 per gallon — in 2026.

If fill-ups are putting a dent in your wallet, consider using a money tracker to monitor spending and create budgets.

Average Price by State for Regular Unleaded in October 2023

Data is courtesy of AAA .

Average Price by State for Premium in February 2025

Data is courtesy of AAA.

Average Price by State for Diesel Gas in February 2025

Data is courtesy of AAA.

Average US Gas Price 1978 to 2022

Historical data is courtesy of the EIA and the Bureau of Labor Statistics.

Tips for Finding Cheap Gas Stations in Your State

There are a few ways to find the cheapest gas in the nearby area and save money on your gas bill:

•   Use an app like GasBuddy to locate the lowest nearby price. The app lets drivers search by gas type, payment type, the brand of gas station, and other factors. The app also offers cashback deals, paid subscriptions, and more.

•   AAA has a gas price monitoring website that gets updated every day. Drivers can search by state and country to find the best prices.

•   Both Google Maps and Waze keep track of gas prices. When you search for gas stations within their maps, the price of gas at local stations will pop up. Although one can’t filter by price or automatically see the lowest price, it’s fairly easy to look around and find the cheapest option.

•   Another useful app is Upside. The app lets users compare gas prices near them, and also earn cash back every time they fill up their tank.

•   Besides the ability to buy in bulk, one of the perks of getting a Costco or Sam’s membership is getting discounts on gas. It’s often the cheapest option for club members.

•   Certain days of the week tend to have lower prices. Generally, Mondays are the cheapest, followed by Sunday, while Wednesday and Thursday are the most expensive days.

Recommended: What Credit Score Is Needed to Buy a Car

The Takeaway

Gas prices go up and down in response to a variety of global and domestic factors. But there are a few ways to source the best deals on gas and stay within your budget, including apps and membership-only retailers.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What was the price of gas in 1980?

In 1980, the average price of gas was $1.22. That is equivalent to $4.56 in 2025 dollars.

What year were gas prices the highest?

In June 2022, gas prices in the U.S. hit an all-time high of $5.00.

How much did gas cost in the 90s?

In the 1990s, gas cost between $1.11 and $1.15 per gallon.

Photo credit: iStock/skodonnell
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL-Q125-067

YouTube is a lucrative platform for both marketers and content creators. YouTube had 2.5 billion unique monthly visitors and 30 billion visits per month in 2024 — more than Amazon, Facebook, Instagram, or Wikipedia — making it an advertiser’s nirvana. Talented influencers flock to YouTube to create video channels, and many earn around $60,000 per year on the platform from advertisers. However, they generally need at least 4,000 hours of unique content and at least 1,000 subscribers to do so.

Here’s a closer look at the average payouts for YouTubers and the heftier payouts for celebrity influencers with outstanding content.

How Much Do YouTubers Make on Average in 2025?

The salary and career website ZipRecruiter reports that the average YouTuber made around $62,052 per year as of January 2025. That’s competitive pay for an entry-level salary. The highest salaries for YouTubers are around $89,000, while the lowest are around $48,500. Interestingly, the range between higher- and lower-paid YouTubers is only around $8,000, implying that experience does not lead to significant advancement.

ZipRecruiter also finds 10 cities where the typical salary for a YouTube Channel job is above the national average. The leading city is Nome, Alaska (average salary $76,975), followed by Berkeley, California ($75,979), Sitka, Alaska ($74,753), and San Francisco ($73,108). Although YouTube salaries are higher in Alaska and California, the cost of living in both states is also high, which might cancel out any salary gains.

Top 10 YouTubers for 2025

The following is a list of the 10 most-subscribed YouTubers along with a brief overview of the reasons for their online appeal. The data were sourced from Search Engine Journal, an online news source for the SEO and marketing community.

1. MrBeast

Subscribers: 351 million

MrBeast, aka Jimmy Donaldson, is a young YouTuber and philanthropist originally from Greenville, North Carolina. He began posting videos in 2013, when he was just 13 years old. He went viral in 2017 with his “counting to 100,000” video. His videos include survival challenges, vlogs, and philanthropic content. Other than the MrBeast channel, Donaldson also runs Beast Reacts, MrBeast Gaming, MrBeast 2, and a philanthropy channel called Beast Philanthropy.

2. Like Nastya

Subscribers: 125 million

PewDiePie, or Felix Arvid Ulf Kjellberg, is a Swedish gaming YouTuber. He registered his channel “PewDiePie” in 2010 and primarily posted videos of himself playing horror and action video games. His channel was one of the fastest-growing channels in 2012 and 2013, and it soon diversified to include vlogs, comedy, shows, music videos, and fundraising. Some of Kiellberg’s content became controversial, and after 2019, Kjellberg semi-retired and uploaded less consistently. In 2016, he was named one of the world’s most influential people by Time magazine.

3. PewDiePie

Subscribers: 110 million

PewDiePie, or Felix Arvid Ulf Kjellberg, is a Swedish gaming YouTuber. He registered his channel “PewDiePie” in 2010 and primarily posted videos of himself playing horror and action video games. His channel was one of the fastest-growing channels in 2012 and 2013, and it soon diversified to include vlogs, comedy, shows, music videos, and fundraising. Some of Kiellberg’s content became controversial, and after 2019, Kjellberg semi-retired and uploaded less consistently. In 2016, he was named one of the world’s most influential people by Time magazine.

4. Alan Chikin Chow

Subscribers: 76.2 million

Alan Chikin Chow is an actor, influencer, and the most-watched YouTube Shorts creator. According to Variety, his content gets 1 billion views in any given month. Chow is also the creator of “Alan’s Universe,” a popular drama about love and friendship that routinely gets more than 500 million views. In 2024, his YouTube channel ranked among the platform’s 50 most-subscribed channels globally.

5. Justin Bieber

Subscribers: 74.7 million

Justin Bieber is known, first and foremost, as a Canadian musician. His original YouTube channel was called Kidrauhl — so named because his father called himself “Lordrauhl.” Bieber posted videos of his songs on Kidrauhl and became famous through the platform. Bieber’s channel Kidrauhl was renamed “Justin Bieber” in 2017.

6. EminemMusic

Subscribers: 64 million

Marshall Bruce Mathers III, known as Eminem, is an American rapper, songwriter, actor, and record producer. His debut album, “Infinite,” was released in 1996. Rolling Stone has included him in its lists of the 100 Greatest Artists of All Time and the 100 Greatest Songwriters of All Time. In November 2022, Eminem was inducted into the Rock and Roll Hall of Fame. His YouTube channel features his music videos and is called EminemMusic.

7. Mark Rober

Subscribers: 63.5 million

No stranger to stunts, Mark Rober has amassed a following on YouTube thanks in large part to a slew of attention-grabbing projects. Examples include building the world’s largest Nerf gun and Super Soaker, glitter bombing porch pirates, and creating an obstacle course for squirrels. That he’s able to pull off such impressive feats should come as no surprise to his millions of subscribers, who are likely already familiar with Rober’s background as a NASA engineer.

8. Fede Vigevani

Subscribers: 63.1 million

Fede Vigevani, also known as Fede, is a Uruguayan musician and YouTuber who’s now based in Medico City. He was part of the YouTube group Dosogas before going solo in 2018. In addition to music, his popular YouTube channel is filled with lighthearted content known for its humor, pranks, and challenges.

9. Taylor Swift

Subscribers: 60.6 million

Taylor Alison Swift is an American singer-songwriter. She was born in West Reading, Pennsylvania, but moved to Nashville at age 14. Her 2006 debut album “Taylor Swift” made her the first female country artist to write a U.S. platinum-certified debut album. Swift is one of the best-selling musicians in history and the only person to have seven albums open with over one million copies sold in the United States. Swift has been named in Rolling Stone’s 100 Greatest Songwriters of All Time. She has also been named Artist of the Decade and Woman of the Decade and is an advocate for artists’ rights and women’s empowerment.

10. Alejo Igoa

Subscribers: 58.7 million

Alejo Igoa is an Argentinian actor, model, and YouTuber whose channel features a heavy rotation of challenges, comedy skits, and vlogs that occasionally include his family and friends. He’s also popular on TikTok, where he often posts dance and lip-sync videos, and on Instagram, where he shares his modeling photos and updates on his life.

How Much Money Does a YouTuber Make Per View?

YouTubers make money from advertisers who place ads with their videos. YouTubers are paid based on how many of their viewers watch the ads that accompany their content. Even if a video gets thousands of views, if no one watches or clicks on the ads, the YouTuber won’t make any money. For a YouTuber to be compensated, a viewer must either click an ad or watch the video ad in full. According to data from Influencer Marketing Hub, the average YouTube channel receives around $0.018 per view.

Recommended: 25 Easy Jobs That Make a Lot of Money With Little Work Without College

How Much Do YouTubers Make Per 1,000 Views?

A YouTuber earns roughly $18 per 1,000 ad views. YouTuber earnings vary depending on whether a video is short- or long-form. YouTubers’ reported income per 1,000 views range between $1.61 and $29.30 for long-form videos. For short-form videos, the payouts were between $0.01 to $0.06 per 1,000 views.

How Much Does a YouTuber Make With 1 Million Subscribers?

The money made on YouTube may not be consistent, particularly for creators who don’t upload new content regularly to ensure a growing following. One YouTuber with 1 million subscribers made between $14,600 and $54,600 per month.

Recommended: 25 High-Paying Trade Jobs in Demand

How Much Ad Revenue Does YouTube Pay Content Creators?

According to Influencer Marketing Hub, creators earn about 55% of the revenue on their channels — for every $100 an advertiser pays, Google pays $55 to the creator. It’s unlikely that a creator will make much money until there is significant traffic to the site and viewers click on ads.

There are some ads that pay per thousand views, but for the view to be counted for payment, a viewer must watch an ad for at least 30 seconds (or half the ad for a very short video). If viewers do click on or view ads for long enough to earn income, the creator shares any advertising revenue with YouTube. Creators only get paid once their AdSense account reaches $100.

Whether you’re raking in millions of subscribers or just starting out, a spending app can help you create a budget, organize spending, and manage bill paying.

The Takeaway

With 2.5 billion unique monthly visitors and 30 billion visits per month, YouTube is a go-to platform for entertainment, education, and marketing. Many YouTubers and celebrities reap millions from ad revenue by posting music videos, gaming videos, entertainment, and educational content. However, for the less famous, it is possible to earn $60,000 to $80,000 a year, which is a competitive salary. YouTubers need traction and a significant following. Pay-outs are typically based on ad views and are made through Google AdSense.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

How much does a YouTuber make a year?

ZipRecruiter reports that the average YouTuber makes around $62,052 per year as of January 2025. The highest salaries are around $89,000, while the lowest are around $48,500.

How much does a YouTuber with 1 million subscribers make?

One YouTuber with about 1 million subscribers made between $14,600 and $54,600 per month. However, the money made on YouTube may not be consistent, particularly for creators who don’t upload new content regularly to ensure a growing following.

Do YouTubers get paid monthly?

YouTube uses an algorithm created in AdSense to decide when and how much to pay content creators. AdSense is owned by Google. Vloggers that gain enough traction to warrant earnings are paid monthly via direct deposit.

Photo credit: iStock/Youngoldman

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL-Q125-066

Dividends are payments that investors can receive from stocks, exchange-traded funds (ETFs), and mutual funds. These earnings count as income and may be taxable, depending on your income and filing status.

We’ll investigate dividend tax rates and the difference between ordinary and qualified dividends.

Defining Ordinary and Qualified Dividends

The IRS divides stock dividends into two categories: ordinary and qualified. The federal tax rate is different for each category. A qualified dividend is one that qualifies for a lower tax rate based on the concept of capital gains. An ordinary dividend, meanwhile, is one that doesn’t qualify for a lower rate.

When a company declares a dividend payment, your dividend is ordinary if you’ve held their stock for less than 61 days over a 121-day period. If, however, you make the stock purchase on or before the date that it’s declared, and then hold it for at least 61 days, it is considered qualified.

The timing also matters. Let’s say that you own stock in Company A, and they announce that a dividend will be paid on December 1. The day before, November 30, is called the ex-dividend date, or ex-date. If you bought your shares of stock 60 days or fewer before November 30, then your dividend is ordinary. But if you bought the stock more than 60 days before November 30, your dividend is qualified.

Qualified Dividend Documentation

When it’s tax time, you’ll receive a 1099-DIV. This is the form that financial institutions use to report dividends to the IRS and relevant taxpayers. Box 1a shows the total ordinary dividends you received during this tax period. Box 1b shows your qualified dividends. The form will also show any federal or state income tax that was withheld. You can use this information plus the federal dividend tax rate to determine what you owe.

Financial institutions must issue a 1099-DIV to shareholders who receive more than $10 in dividends and other distributions for the year.

Tax Information for Ordinary and Qualified Dividends

The ordinary dividend tax rate is the same as an individual’s income tax bracket for the year.

The qualified dividend tax rate for 2024 is calculated using capital gains tax rates. This may be 0% depending on your taxable income and filing status. Here are the latest figures from the IRS for the 2024 tax year:

•   Less than $47,025 for single or married filing separately.

•   Less than $63,000 for head of household.

•   Less than $94,050 for married filing jointly or qualifying widow(er).

The qualified dividend tax rate rises to 15% for the next tax brackets:

•   $47,026 to $518,900 for single filers.

•   $47,026 to $291,850 for married filing separately.

•   $63,001 to $551,350 for head of household.

•   $94,051 to $583,750 for married filing jointly or qualifying widow(er).

Once your household income exceeds the 15% bracket, you’ll pay a 20% tax rate on any qualified dividends. There may also be a 3.8% net investment income tax. Consult your accountant or financial advisor regarding your situation.

Recommended: 2024 IRS Tax Refund Dates

Dividend Tax Rate 2023

The thresholds can change by year. For example, the dividend tax rate for 2023 was as follows

•   0% dividend tax rate:

◦   Single filers, up to $44,625

◦   Married filing jointly, up to $89,250

•   15% dividend tax rate:

◦   Single filers, $44,625–$492,300

◦   Married filing jointly, $89,250–$553,850

•   20% dividend tax rate:

◦   Single filers, $492,300+

◦   Married filing jointly, $553,850+

Dividend Tax Rate 2025

Looking ahead, we’ve got some insights into the 2025 tax year, which you’ll file in 2026. A married couple filing jointly won’t pay taxes on qualified dividends until their income is above $96,700. Above that amount, the tax rate will be 15%. The tax raise will go up to 20 percent when a couple earns more than $600,050.

Individual filers won’t pay 15% until their income is greater than $48,350. They’ll pay 20% when income exceeds $533,400.

Whether you’re paying a tax bill or getting a refund this year, it helps to have your financial house in order. With a money tracker app, you can set budgets, manage bill paying, and monitor your credit.

Recommended: Guide to Filing Your Taxes for the First Time

Why Are the Two Types of Dividends Taxed Differently?

Qualified dividends are more favorably taxed as an incentive to investors to hold onto stocks for a longer period of time. This is based on the concept of capital gains.

Additional Qualified Dividend Requirements

Besides the holding period described above, the dividend must have been paid by a corporation in the U.S. or a qualifying foreign one. Plus, the payment can’t be a dividend in name only. For example, payments given by tax-exempt agencies don’t qualify.

If a payment doesn’t satisfy all three requirements, then it can’t be a qualified dividend. It may be an ordinary dividend or another type of income.

The Takeaway

There are two broad types of dividends: ordinary and qualified. Qualified dividends are taxed at a lower rate than ordinary dividends. For a dividend to be qualified, an investor must hold the stock for at least 61 days during a particular time frame. A 1099-DIV will break out dividends into qualified and ordinary for the taxpayer’s information. There are three tax rates for qualified dividends. The lowest tax brackets pay nothing. The next brackets pay 15%, and the highest brackets pay 20%. Ordinary dividends are taxed as regular income.

To seamlessly track your finances, consider a spending app, which allows you to handle tasks like budgeting, paying bills, and more.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What is the tax rate on dividends in 2024 and 2025?

The ordinary dividend tax rate is based on your tax bracket. With a qualified dividend tax rate, it depends on your filing status and your income. The lowest tax brackets pay nothing, the middle brackets pay 15%, and the highest brackets pay 20%.

How do I calculate my qualified dividends?

Investors receive form 1099-DIV from their financial institution, which provides the amount of ordinary and qualified dividend income received during the year. The IRS also provides a worksheet.

Why are my qualified dividends being taxed?

Dividends are a type of income, and investors who receive them typically pay taxes on them. It’s true that individuals who make less than $47,025 in 2024 pay no tax on qualified dividends. However, taxpayers in higher brackets must pay 15% or 20%.

Photo credit: iStock/AsiaVision

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.


Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL-Q125-056

If you’re looking to reduce the amount of income tax you’ll need to pay, there are numerous strategies to consider. Familiar moves include contributing to tax-deferred retirement and health-spending accounts, deducting certain taxes and interest, and making charitable donations. More complex maneuvers include timing investments to offset gains with losses.

Because each person’s situation is unique, be sure to check with your tax accountant to find out how a potential strategy might work for you. Note that some of the strategies included in this guide have income limits.

Keep reading to see how many of these 25 tactics you can implement.

25 Ways to Lower Your Taxable Income

As you look through this list of 25 ideas on how to pay less in taxes, you’ll note that some are broad, advising how to reduce either W-2 taxable income or self-employment income. Meanwhile, others are more targeted — for instance, applying only to the self-employed. Keep track of ideas that pertain to your situation so you can explore them further.

1. Contribute to a Retirement Account

Many IRA contributions are tax deductible. If you’re covered by a plan at work, you can contribute up to $23,000 to a 401(k) plan in 2024 ($23,500 in 2025), and an additional $7,500 if you’re over 50. You can also contribute $7,000 to an IRA ($8,000 if you’re over 50), though your deduction may be limited depending on income and other factors. (These amounts will remain the same in 2025.)

Self-employed individuals can contribute between 25% and 100% of net earnings from self-employment, up to $69,000 for 2024 (up to $70,000 for 2025). Plans available to the self-employed include the Simplified Employee Pension (SEP) plan, solo-401(k), and Savings Incentive Match Plan for Employees (SIMPLE IRA).

2. Open a Health Savings Account

A health savings account (HSA) allows you to deposit money on a pre-tax basis. Contribution limits depend on your health plan, age, and other factors, but most individuals can contribute $4,150 for 2024 and $4,300 for 2025.

Funds can be used to pay for qualified medical expenses or rolled over year to year. You must have a high deductible health plan (HDHP) to contribute to an HSA.

3. Check for Flexible Spending Accounts at Work

In lieu of an HSA, you can contribute up to $3,200 in pre-tax dollars to a flexible spending account (FSA). In 2025, the contribution threshold rises to $3,300. FSAs allow people with a health plan at work to deposit money and then use it to pay for qualifying health care costs. Unlike HSAs, FSAs don’t require an HDHP to qualify. The downside: Only a small portion of funds may be rolled over to the following year.

4. Business Tax Deductions

The IRS guidelines around business deductions change frequently, so it’s wise to watch out for their announcements throughout the year. Some business expenses apply only to self-employed people.

5. Home Office Deduction

When a self-employed person regularly uses a specific area of their home for business purposes, they may qualify to deduct costs associated with that part of the house. The home office deduction can be calculated in two ways (regular or simplified) up to the current gross income limitation. For more information, search for “IRS publication 587.”

When you’re in business for yourself, every moment counts. Online tools can help take the guesswork out of tracking your spending, setting up budgets, analyzing spending habits, and more.

6. Rent Out Your Home for Business Meetings

If you’re self-employed, you can also rent out your home for business events and meetings, collect the income — and not have to pay income taxes on that rental income. To learn specifics, visit https://www.irs.gov/pub/irs-drop/rp-13-13.pdf.

7. Write Off Business Travel Expenses

Travel expenses, as defined by the IRS, are the “ordinary and necessary expenses of traveling away from home for your business, profession, or job. You can’t deduct expenses that are lavish or extravagant, or that are for personal purposes.” For IRS guidance for both W-2 employees and the self-employed, go to https://www.irs.gov/taxtopics/tc511.

8. Deduct Half of Your Self-Employment Taxes

When calculating your adjusted gross income (AGI) as a self-employed person, using Form 1040 or Form 1040-SR, you can deduct half the amount of your self-employment tax. In 2024 and 2025, the self-employment tax rate is 12.4% for Social Security and 2.9% for Medicare, based on your net earnings.

9. Get a Credit for Higher Education

This tax credit can go up to $2,500 based on tuition costs along with what you paid in certain fees and for course materials. As a first step, income tax owed is reduced dollar for dollar up to your limit. Then, if your tax credit is more than what you owe, you may be able to get up to $1,000 in a refund.

10. Itemize State Sales Tax

Currently, you can deduct a total of $10,000 for itemized state and local income taxes, sales taxes, and property taxes when you use Form 1040 or 1040-SR. If married but filing separately, the total is $5,000 per person. The IRS provides a calculator that you can use to figure out your deduction at https://apps.irs.gov/app/stdc/.

11. Make Charitable Donations

A taxpayer can typically deduct up to 60% of their AGI to qualified charities. But starting with contributions made in 2020, the IRS implemented a temporary suspension on limits. This means that a person can make qualified charitable contributions up to 100% of their AGI.

12. Adjust Your Basis for Capital Gains Tax

If you sell an asset, including but not limited to investments, a capital gains tax is levied on the difference between the purchase price and what it sells for. The adjusted basis also takes into account the costs of capital improvements made, minus decreases such as casualty losses. For more on the topic when selling a home, search for “IRS publication 523.”

Recommended: Should I Sell My House Now or Wait?

13. Avoid Capital Gains Tax by Donating Stock

You may be able to avoid paying capital gains tax if you transfer the ownership of your appreciated stock (held for more than one year). This is something that needs to be handled in exactly the right way; your tax accountant can help.

14. Invest in Qualified Opportunity Funds

If you invest in property through a Qualified Opportunity Fund, the IRS states that you can temporarily defer paying taxes on the gains. Taxes can be deferred (not reduced or canceled) up until December 31, 2026, or until an inclusion event occurs earlier than that date. This is a complex strategy and, again, you may want to get professional advice.

15. Claim Deductions for Military Members

You may be able to deduct moving expenses if you’re a member of the military on active duty who relocated because of a military order and permanent change of location. In this case, you can potentially deduct your unreimbursed moving expenses as well as those for your spouse and dependents. You can calculate relevant expenses on “IRS form 3903, Moving Expenses.”

16. Enroll in an Employee Stock Purchasing Program

In an employee stock purchase plan (ESPP), an employee who works at a company that offers this program can buy company stock at a discount. The company takes out money through payroll deductions and, on the designated purchase date, buys stock for participating employees. Note that only qualified plans have potential tax benefits.

17. Deduct the Student Loan Interest You’ve Paid

You may qualify to deduct student loan interest. Annual deduction amounts are the lesser between the amount of interest paid and $2,500. This deduction is lowered and eliminated when your modified adjusted gross income (MAGI) reaches a certain limit based on your filing status.

18. Sell Your Losing Stocks to Claim Capital Loss Carryover

If you sell stock at less than the purchase price, you’ve experienced a capital loss. You can use that loss to offset any capital gains that year. If you’ve lost more than you’ve gained, this can reduce your taxable income, which could reduce what you owe up to $3,000 for individuals and married couples, and $1,500 for someone married who filed separately.

Recommended: Tax Loss Carryforward

19. Deduct Mortgage Interest

You can deduct the money you paid on mortgage interest on the first $750,000 (or $375,000 if married, filing separately) of mortgage debt you owe. Higher limits exist ($1,000,000/$500,000) if the debt was taken on before December 16, 2017.

20. Deduct Medical Expenses

Under certain circumstances, you can deduct medical and dental expenses for yourself, your spouse, and dependents. You’ll need to itemize on your tax return and can only deduct qualifying expenses that exceed 7.5% of your AGI.

21. Delay IRA Withdrawal Upon Retirement

You can delay IRA withdrawals so that you don’t have more taxable income when you’re a high earner.

22. Ask Your Employer to Defer Income

You pay income tax in the year the income is received. Although there are reasons why employers typically can’t postpone providing paychecks, they may be able to delay a bonus to the following year as long as this is standard practice for them. If self-employed, you can delay sending your end-of-year invoices to bump December payments to the following calendar year.

23. Open a 529 Plan for Education

A 529 plan allows you to save for future educational expenses. Although the contributions themselves aren’t deductible, interest that accrues in the account is tax-free, federally, as well as being tax-free in many states. In other words, when the money is withdrawn to pay college expenses, it is not taxed.

24. Buy Tax-Exempt Bonds

Interest you receive on muni bonds, for example, is not federally taxed (although there may be state and/or local taxes). These are typically very safe investments, although the interest rates may not be what you want.

25. Time Your Investment Gains or Losses

Known as tax loss harvesting, this strategy takes planning because you’ll want to ensure that any investment gains can be offset, as much as possible, by tax losses. So you may decide, as just one example, to hold on to a stock that’s lost significant value — selling it at a time when it can offset a stock sale with a sizable gain.

The Takeaway

High earners looking to reduce taxable income have many avenues to explore — some you’ve likely heard of, with others perhaps new to you. For instance, investors may be able to take advantage of tax loss harvesting, tax loss carryover, or tax efficient investing. Consult your tax accountant about your specific situation. And to take advantage of tax reduction opportunities, it’s important to keep careful track of your financial transactions.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

How can I lower my taxable income?

If you’re wondering how to reduce your taxable income, there are numerous strategies that might work for your situation. A good place to start: Contribute to a retirement account, open a health savings account, and learn which taxes and interest you can deduct. Talk to your tax accountant about specific questions you may have.

What are the tax loopholes for the rich?

If you’re looking to reduce your taxable income, consider making charitable donations and investigating investment strategies that offset gains with losses.

Do 401(k) contributions reduce taxable income?

Said another way, are IRA contributions tax deductible? Retirements typically offer some tax benefits with specifics varying based on the type of retirement account. Traditional IRAs have different rules, for example, than Roth IRAs.

Photo credit: iStock/Petar Chernaev

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.


Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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An individual preparing to file a federal tax return will want to think back on gifts given in the prior year. If a gift exceeds a certain threshold, the IRS wants it reported by Tax Day — but only extremely wealthy taxpayers will ever have to pay taxes on their lifetime of gifts.

In 2024, you could have made gifts worth up to $18,000 per recipient without reducing your lifetime exemption, being required to report the gift to the IRS, or paying federal gift tax.

Gifts over that value count toward the lifetime gift and estate tax exemption of $13.61 million (per spouse, if married), rising even higher in 2025.

What Is a Gift and What Is Not?

According to the IRS, gift tax is applicable when property is transferred from one person to another, with the giver receiving nothing, or less than full value, in return.
The tax applies even when the donor doesn’t consider the transfer a gift.

The IRS defines the federal gift tax broadly, including when the gift is monetary or a physical property, or a donor allowing someone to stay in their property or earn income from the property without getting something equal in return.

Someone who makes an interest-free or reduced-interest loan may also be seen as giving a gift.

When you make a gift other than cash, you must assess the property’s fair market value: the price a willing buyer would pay in the open market. If you’re buying a house from a family member, you might ask for a gift of equity.

Generally, the IRS does not consider these taxable gifts:

•   Gifts that are not more than the annual exclusion for the calendar year

•   Another person’s tuition, as long as payments are made directly to the educational institution

•   Another person’s medical expenses, as long as the payments are made directly to medical service providers

•   Gifts to a spouse who is a U.S. citizen

•   Gifts to a political organization

•   Gifts to IRS-approved charities

What Is a Gift Tax Return?

Par for the course with the IRS, there’s a form involved if you made a gift exceeding the annual limit: Form 709. It is to be filled out the year after the giving of the gift. So if a relevant gift was given in 2024, the information belongs on the 2025 tax return form.

Information on this form lets the IRS know that a gift has been given that falls within the scope of the gift tax.

Married couples may “split” gifts and essentially double their annual exclusion. If you are married and your spouse consented, you could have given up to $36,000 to an unlimited number of individuals in 2024 with no gift or estate tax consequences. For 2025, that amount rises to $38,000.

Spouses who split gifts always have to file Form 709, even when no taxable gift was incurred.

The gift tax is tied to the estate tax. As of tax year 2024, you can leave up to $13.61 million to relatives or friends free of any federal estate tax. If you’re married, your spouse is entitled to a separate $13.61 million exemption. Clearly this is the province of high earners.

Who Files the Gift Tax Return: the Giver or the Recipient?

Taxes typically fall on the donor, not the recipient.

There may be special circumstances when the recipient will agree to pay the tax. If you make this agreement, the IRS suggests that you contact your tax professional for guidance on how to proceed.

Annual Exclusion for 2024

You could have made an unlimited number of tax-free gifts in 2024 as long as no one received more than $18,000.

If you held back, just know that you can make an unlimited number of tax-free gifts of up to $19,000 in 2025, when the lifetime gift tax exemption increases to $13.99 million per person.

Need help monitoring where your money is coming and going? A spending app lets you set budgets, organize spending, and manage upcoming bills.

When Do You Need to File a Gift Tax Return?

This follows the regular tax filing deadline, which is April 15 in 2025.

If you need a gift tax return extension when you’re not filing a tax extension for your general income tax return, file Form 8892. This will typically give you a six-month extension.

How to File a Gift Tax Return

First, you use the federal gift tax return Form 709 that’s available online through the IRS. The IRS also provides gift tax return instructions. The agency includes determining if you need to file a form and, if so, for what gifts.

You may need to decide whether you and a spouse will split the gift taxes.

Form 709 is complicated. Whether you’re a seasoned tax filer or filing taxes for the first time, a tax pro could be of great help.

Recommended: How Long Does It Take for the IRS to Mail a Refund?

What Happens If I Don’t File a Gift Tax Return?

You could be fined by the IRS, and the taxing authority is becoming more vigilant in levying these failure-to-pay penalties. The fine equals 0.5% for every month that the tax isn’t paid, based on the amount of the gift. So, as time goes by, the fine gets bigger. If the IRS determines that fraud was involved, the fine can go up to 5%.

If this oversight isn’t discovered in a person’s lifetime, the estate could be assessed the accumulated fine.

How Long Should You Keep Gift Tax Returns?

Keep them indefinitely! They will likely be needed by the executor of your estate.


Recommended: 41 Things to Do With Your Tax Refund

The Takeaway

A gift tax return might inspire dread, but it’s simply a way for the IRS to track eligible gifts made in a year and over a lifetime. Most people will never pay gift taxes.
Want to keep tabs on gifts and track all of your money in one place? A money tracker app may be able to help.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What triggers a gift tax return?

The main trigger is exceeding the annual limit of what you can give without taxation. The annual amount per donee is $18,000 in 2024 and $19,000 in 2025.

Do I have to file a gift tax return if I receive a gift?

In general, it’s the donor of the gift, not the recipient, who pays the tax.

What happens if I don’t file a gift tax return?

The IRS may levy fines. If it doesn’t happen in your lifetime, the situation may be uncovered by the IRS after your death, and fines can be levied on the estate.

Photo credit: iStock/VioletaStoimenova

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.


Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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