To effectively reduce taxes each year, you need a plan in place. Many choose to work with outside tax specialists who know the tax code inside and out. Others do their own research, managing their investments, doing their own tax returns, and ensuring that they're ready when April 15th rolls around.

No matter how you cope with your own tax problem, there are things that you can do today to dramatically reduce the taxes that you are paying.

In fact, the Taxpayer Relief Act of 1997 and the Economic Growth and Reconciliation Act of 2001 created hundreds of new tax breaks that you can use to reduce your annual tax bill. Plus, the Acts also increased the Unified Credit, currently set at $1,500,000.