Even if you have not been systematic about financial planning since the beginning of the year,
it’s heartening to know that it’s never too late. You can jump into this marathon of financial
planning whenever you want to, but like all healthy habits, the earlier you start the better it is for
your own good.

Since year-end is right around the corner so we’ll discuss some things that we can do
towards the end of the year to save on our taxes and maximize our deductions.

• Make HSA contributions. A Health Savings Account (HSA) is for people who may be eligible to put away $7,750*
  each year. And if you are 55 years old, or older, you can put away an added $1,000. This is a
  tax deduction for your business if you are self-employed, or if you are an employee that is
  eligible for an HSA, it could be a tax personal tax deduction as well.
• If employed, be sure to fund IRA retirement accounts.
  Retirement accounts such as an IRA allow you to put away as much as $6,500*, if you are
  under 50 years old. You can put away as much as $7,500* if you are 50 years old or older.
  This is allowed if you or your spouse earns at least $7,500*. If you earn nothing and your
  spouse earns $15,000* you would both, be eligible to put up to $7,500* each into an IRA
  account. You may also choose to contribute to a Roth IRA. This will not help you with
  current taxes, but it will save you future taxes because any money left in a Roth IRA is tax-
  free after 5 years.
• If you are self-employed, set up a Keogh Plan, 401K, or Solo-K (1-2-person retirement
  plan) and fund them to maximize tax savings.
  You can also put money into a Simple IRA, SEP IRA, or a Solo 401K, which is a retirement
  account for an owner and/or owner’s spouse. Keogh’s let you put away up to 25% of your
  earnings (limited) while 401k’s allow up to $66,000*, depending on your age and income.
  SEP IRA’s let you put away up to $66,000*, while Simple IRAs allow you to put away as
  much as $15,500*, if under 50 or $19,000* if 50 or older. Don’t forget that many employers
  match retirement plan contributions up to certain limits and the IRS offers a tax credit for
  new savers, for both employers & employees.
• Don’t hold off on Energy Saving Home Improvements*.
  Energy saving home improvements such as exterior doors, windows, air conditioners, water
  heaters, and solar devices allow you an opportunity to save on federal taxes, and some states
  may offer state tax credits as well. A tax credit is a reduction on your taxes, while a
  deduction reduces your taxable income. Typically, $1 in tax credit may be equivalent to $3 in
  tax deductions. It is far better to receive a tax credit than a tax deduction. The Inflation
  Reduction Act expanded this credit, with both Home Improvements, Residential and even
  business energy credits.
• Use IRAs to make charitable contributions.
  You can take money out of your IRA for a charitable contribution, which means youeffectively get a tax-free withdrawal from your IRA if the amount of the charitable
  contribution is the amount of your IRA distribution. You can donate up to $100,000 and get a
  tax deduction for the contribution, and not pay taxes on the distribution.
• Divorces
  Any alimony payments for divorces decreed after 2018 will not be tax deductible. Any divorces
  decreed prior to 2019 still allow alimony payments as a deduction, but you must now list the
  date of the divorce on the tax return, along with the recipient’s name address, social security
  number and amount paid to ex-spouse.

Call today, don’t delay! See how this affects you. We can be reached at 602-264-9331 and on all social media under azmoneyguy.

Related Blog Posts