Even as the calendar has turned to 2024, there are several things one can do prior to filing taxes to reduce your overall tax liability for 2023. A part of our Purpose-Built Planning Process (which you can find here) involves implementing strategic tax planning opportunities that reduce our client’s tax bill. Some of the more common strategies implemented are:
- HSA contributions (if covered under a high-deductible health plan) – the maximum contribution for tax year 2023 is $3,850 for self-only coverage; $7,750 for family coverage (you can contribute additional dollars if age 55 or older). The maximum HSA contribution for 2024 has increased.
- IRA contributions – there are some nuances to be eligible to make tax-deductible IRA contributions – such as if you (or your spouse) are covered by an employer plan, along with AGI phaseouts. If eligible, the maximum contribution for 2023 is $6,500 ($7,500 if age 50 or older). IRA contributions have increased for 2024.
- SEP-IRA contributions – maximum contributions available for individuals with a SEP-IRA is the lesser of 25% of total compensation or $66,000 for 2023. SEP IRA maximum contributions have increased for 2024, as well.
While tax season can be stressful and frustrating, talking with an advisor proactively about implementing tax savings strategies can give one peace of mind during this hectic time of year. We occasionally have clients who use outside accountants. We’ve heard countless times, “If only my guy would have told me that, I would have done it.” This is a reactive phrase that does not do you any good, only exacerbates the frustration. Fortunately, we have tax expertise on staff, which includes a Certified Public Accountant and Enrolled Agent, whom provides a level of tax expertise and planning, hence, providing a tremendous value to our clients.
If you find yourself in a similar situation, we would love the opportunity to discuss our process and how tax planning is a crucial part to your overall financial well-being.
Give us a call at 865-379-8200.
