• No categories
July 24, 2024

Topple Next Year’s Tax Bill With Strategic Moves Now!

3 min read

Topple Next Year’s Tax Bill With Strategic Moves Now!

Unlock Hidden Tax Breaks: Six Pro Tips for Savvier Savings This Tax Season

Hey there! Let’s talk taxes. Not the most thrilling topic, I know, but what if I told you that understanding a few lesser-known tax strategies could save you a bundle? Yep, it’s true. So, grab a cup of coffee, and let’s dive into six savvy tax tips that could make a noticeable difference in your wallet come tax time next year.

Boost Your Retirement Savings
Ever think about how you can pay less tax while saving for the future? It’s a win-win with retirement accounts like IRAs or 401(k)s. For 2024, you can stash away up to $6,500 in an IRA and a whopping $22,500 in a 401(k). If you’re over 50, you can add a bit more as a catch-up contribution.

What to Do: Check out your current retirement contributions and crank them up if you can. No 401(k)? No problem. Look into opening an IRA with a reputable financial institution and set a little money to transfer automatically every month.

Play Smart with Investment Losses
Not all investments pan out, but even the duds can be useful. If you sell underperforming stocks at a loss, you can use those losses to balance out any gains from better-performing investments. It’s called tax-loss harvesting, and it’s a pretty smart way to lower your tax bill.

What to Do: Take a peek at your investment portfolio before the year wraps up. If some stocks haven’t done well, think about selling them to offset any wins you’ve had elsewhere.

Max Out Your Health Savings Account
HSAs are like a triple tax break – your contributions are deductible, the money grows tax-free, and you can spend it tax-free on qualified medical expenses. For 2024, you can put away $3,850 for yourself or $7,750 for your family.

What to Do: If your health plan qualifies, open an HSA and start funneling money into it. Your future self will thank you when you need to pay for medical expenses.

Deduct Your Home Office
Work from home? If you have a dedicated workspace, you might be able to claim a portion of your home expenses, like internet, utilities, and rent.

What to Do: Measure your workspace to figure out what percentage of your home it uses and keep track of all relevant expenses. When tax time rolls around, you’ll have everything you need to get this deduction right.

Tweak Your Tax Withholding
Owing money at tax time can be a pain. If you find yourself in this boat often, it might be wise to adjust how much tax your employer withholds from your paycheck.

What to Do: Look over your recent tax returns and check out the IRS withholding calculator online. If it looks like you’re coming up short, hand in a new W-4 form at work to bump up your withholding.

Invest in Energy-Efficient Upgrades
Thinking about some home improvements? Choose upgrades that save energy, and you might snag a tax credit. Things like solar panels and geothermal heat pumps can qualify.

What to Do: Do a bit of homework on which improvements are covered by tax credits and make sure any products you use comply with Energy Star standards. Save your receipts and documents to make claiming your credits straightforward.

There you have it—six tax tips that can help you keep more of your money. Start setting these up now, and you could see a nicer tax refund—or a smaller tax bill—next year. Who says taxes can’t be a little exciting?

Photo Credit: Envato Elements
NY Discover