Tax Tips: 5 Last-Minute Ways to Save Money on 2018 Taxes
Tax day is Tuesday, April 15. If you’ve haven’t filed yet, we have good news. There may be ways to reduce your tax bill for 2024 (or even set yourself up for a refund). Check with a tax advisor for assistance with your specific circumstances.
Contribute to a traditional IRA or HSA
You can still contribute to a traditional IRA and claim a deduction up until April 15. There are limits on how much you can contribute and deduct based on your filing status and whether you have access to a retirement plan at work. If you are not covered by a plan at work, you can usually deduct the full amount.
You can also contribute to a health savings account, or HSA, up until tax filing day. Be sure to specify that your contributions are for 2024. This lowers your taxable income now and the money can be used for qualified medical expenses over time. HSAs have several tax and investment benefits that make them a nice addition to your retirement nest egg.
Don’t have an IRA or HSA? Let us help you open one!
Small business owner? Contribute to a SEP-IRA
Whether you run a side gig or small business, you can contribute to a Simplified Employee Pension Plan and let the money grow tax deferred. A SEP-IRA is a traditional IRA designed for small businesses; it has the same investment, distribution and rollover rules as a traditional IRA. Contributions for 2024 can be up to 25% of your compensation or $69,000 for 2024, whichever is less.
You can set up and contribute to a SEP-IRA until the filing date for your business, including any extensions. One caveat: If you have employees, the company must contribute the same amount to all employees’ SEP-IRAs. See the IRS website or consult a tax professional for other eligibility requirements.
Reward yourself with the Saver’s Credit
You may be able to take a tax credit for eligible contributions to your IRA or employer-sponsored retirement plan. You can also claim the credit for contributions to an ABLE account if you are the beneficiary. You must be 18 or older, not able to be claimed as a dependent on another person’s return, and you cannot be a student. The exact size of the credit is based on your contributions and adjusted gross income, but for 2024 you can claim up to $1,000 for an individual or $2,000 for married couples filing jointly.
Deduct medical and dental expenses
So, gather those receipts as expenses can add up.
Make the best of a tough year
If you are a low-to-moderate income household, you may be eligible to claim the Earned Income Tax Credit (EITC), which can lower the amount of taxes you owe or even provide money back at tax time.
In 2024, the credit is worth up to $7,830. The exact credit amount depends on your income, marital status and family size. You do not have to have children to claim the credit but must have earned income during the year.
Remember past tax breaks
If you could not fully claim deductions or losses on previous returns due to IRS limits, you may be able to carry the remainder over to 2024. It’s worth the time to look back at prior years to make sure you don’t miss an allowable loss.
