You can save a lot of money on your taxes if you follow these steps.

Around the time I stopped fighting with my parents and began listening to them, my dad imparted some brilliant financial advice. He told me to become a scholar of the tax law. OK, perhaps he didn’t use those exact words, but the message was the same: Know the tax law and take every tax deduction to which you are entitled.

This advice stuck with me, and I’m certain it has saved me thousands of dollars.

The Internal Revenue Service website offers excellent resources to help you further understand the following tax deductions and credits. Study the credits well, as those benefits reduce your taxes dollar by dollar. In other words, if you owe $1,000 in taxes and receive a $150 tax credit, your taxes owed decrease to $850. That’s an extra $150 in your pocket.

By spending a few hours each year keeping abreast of the tax law, you can save thousands on taxes over the years. In fact, keeping a tax reduction mindset in your everyday life will serve your finances well.

1. Retirement account contributions are the top tax reduction tips as they serve two purposes. Most contributions (except the Roth individual retirement account) allow you to deduct from your taxable income the amount paid into the retirement account. This reduces your total taxable income. Further these funds grow tax free until retirement. If you start early, this strategy alone can secure your retirement.

2. Contribute to a health savings account if you have a high-deductible medical plan. The contributions unused for medical expenses can roll over indefinitely, and grow tax-free (similar to the assets in a retirement account).

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