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Who wouldnt want a chance to improve the likelihood of getting money back?
Lucky for you, there are strategies that you could employ to do just that.
This strategy saves you money by lowering your taxable income.
First, your contributions are tax-deductible, said Bechtol.
Second, the HSA grows tax-free, and third, withdrawals forqualified medical expensesare tax-free.
Individuals 55 and over can contribute an additional $1,000 as a catch up contribution.
This means sellinginvestmentsat a loss to offset gains from other investments.
This strategy can help reduce your taxable income by up to $3,000 per year, he added.
Charitable Donations
Donating to charity is another viable tax-saving alternative.
The donations are tax-deductible if you itemize your tax deductions, Bechtol explained.
you might donate cash, goods or even appreciated securities to earn a significant tax benefit.
It helps avoid underpayment penalties at the end of the year, Bechtol said.
In 2024, you’re free to contribute a maximum of $3,200 to healthcare FSA.
It reduces your taxable income and provides tax-free funds for eligible expenses.
These deductions add up and together reduce your taxable income, Bechtol pointed out.
Its a good idea to work with an accountant to be sure youre only deducting legitimate expenses, however.
Small businesses should also consider advantageous deductions like Section 179 to immediately expense equipment purchases.
A manufacturing client bought equipment in December and deducted $70,000, saving $15,000 in taxes.
Refinance a Mortgage
Blain advised homeowners to reviewmortgages and linesof credit.
The Fed just cut interest rates, so refinancing high-rate debt may cut payments.
HELOC interest deductions were reduced, so borrowers should do the math, said Blain.
One couple cut 5 years off their mortgage and $100,000 in interest by refinancing.
One client paid $20,000 for a surgery in December and saved $5,000 on her taxes.
Always consult experts on major financial decisions.
Even just pairing a couple of these strategies together could lead tosignificant tax savingsnext year.
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