Your Year-Round Tax Planning Check-Up
Keep your tax planning on track
Tax planning isn’t just a springtime activity. Just like going to the doctor for annual check-ups is a crucial part of maintaining your health, so too are annual check-ups for your tax planning. Your needs evolve from year to year, so the following checkpoints can help you ensure your
tax planning stays on track.
Be Smart
Consider these tips to help yourself now and in the future!
maximize health savings account contributions
With a high-deductible health insurance policy, you are eligible for a health savings account (HSA) which are triple tax free. Your contributions reduce your taxable income in the year you make them. The interest, dividends and capital gains from these accounts are free from tax. Withdrawals used to pay for qualified medical expenses are also tax free. For the 2024 tax year, HSA contribution limits are $4,150 for individuals and $8,300 for families. Those who are 55 and older can contribute an additional $1,000 in catch-up contributions. Because of the compounding benefits of HSAs, it’s advantageous to assess your current contributions and how you might be able to increase them throughout the year.
contribute to a traditional IRA
For traditional IRAs, contributions are not taxed until you take a distribution. Contributions to traditional IRAs may be fully or partially
deductible based on income and your filing status.
Single taxpayers covered by a workplace plan and earning above
$83,000 can’t deduct contributions. For married couples where a workplace plan covers both spouses, deductions typically disappear above $136,000. Maximizing traditional IRA contributions can be a beneficial strategy for certain people.
Meet with your wealth advisor to discuss the right approach for you.
contribute to a qualified retirement plan
First, ensure you’re taking advantage of any employer-match programs.
Then, if you want to maximize your pretax and retirement savings, look to contribute as much as you can (up to $23,000 for 2024 and up to
$30,500 for those over 50).
adjust your W-4 withholdings
Form W-4 tells your employer how much federal income tax to withhold from your paycheck. Many people neglect to update this form each year, but it can make a big difference come tax time. If you owed money this year, consider future additional withholdings from your paycheck. However, if you received a large refund, think about withholding less money from your paycheck. Use this extra money to fund a high-yield savings account, money market account, savings bond or other investment vehicles.