As we enter into the fourth quarter of the year, you may be surprised to learn there are things you can do right now that have an impact on your taxes. Here are four strategies to implement right now.
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Many people believe that taxes are likely to go up in the future, so what can you do about it? Do we really have enough time in the year to take advantage of these tax strategies?
To start, do you know the maximum contributions you can make in your retirement funds? Are you reaching the maximum amount of the plan allowed? Perhaps you don’t feel you can contribute up to the max, but there is still room to put money away for retirement. Regardless of your situation, you’ll want to prioritize contribution retirement funds as much as possible.
When it comes to your health insurance, do you have a high deductible plan? If so, are you contributing to an HSA? The health savings account gives a “triple tax savings” and can save you a lot of money in the long-run. There are limitations to consider on an HSA, but you might find contributing to it will bring numerous benefits.
If you are over 70.5, are you paying attention to your required minimum distributions? Do you know the difference between your IRAs or 401(k)s? This is especially something to be mindful of when it comes to inherited IRAs. Further, you may want to consider how your RMDs are being used when it comes to charitable giving.
Are there more strategies? Absolutely. Between a complicated tax system and everyone having a unique situation, there are several other strategies that can be implemented. But hopefully a few of these apply to your situation and can help you think strategically when it comes to your money.
Listen to the full episode to hear all of the tax strategies or click on the strategy below for more specifics.
[1:05] – Why now? Do we really have enough time to implement these tax strategies this year?
[2:48] – #1 Tax strategy: Max out your 401(k) plan or at least up to the match.
[6:07] – #2 Tax strategy: If you have a high deductible plan, you need to contribute to an HSA.
[9:41] – #3 Tax strategy: If you are over 70.5, you have to take out RMDs.
[13:15] – #4 Tax strategy: Use your RMDs for your charitable donations.