Deductions can help save money on taxes

The end of the year is here, and that also means that it's time to start thinking about filing taxes. While the economy showed some improvement this year, it is still recovering slowly, and many people are looking for ways to save money. Taking advantage of tax deductions can be a viable route for reducing expenses, and ABC News recently spoke with a few financial experts who highlighted a couple of ways to save big.

People can consider allocating a larger portion of their income into a 401(k) plan so less of what they earn is considered taxable income. Setting up an IRA account before the April 15 tax-filing deadline can also help to lower an individual's tax bill. The news source also pointed out that people have the choice to deduct state and local income tax or sales tax, an option that will expire this year. People who live in income tax-free states can make major purchases before the new year and then deduct the sales tax.

On a state level, deductions and incentives can vary, and many states have options to help family caregivers save. They may be able to deduct medical expenses for things such as medication or medical alarm devices and other home healthcare technology.