Year-End Tax Cutting Moves to Consider
Even though tax day is months away, there are tax-planning strategies you can still do this year to help manage your 2024 tax season. Here are some things to consider before December 31.
Maximize Retirement Contributions: Contributing more money to your 401(k) or IRA can help reduce your taxable income. If your employer matches contributions, it’s always wise to contribute the maximum allowed if you have the means. This can help reduce your taxable income for the current year as well as boost your overall savings.
Review Tax Withholdings: Check your W-4 to ensure you are withholding the amount you want, if any. Examining and adjusting your withholdings can help prevent a large tax bill or refund next year.
Contribute to Health Savings Accounts (HSAs): If you’re eligible, contribute to an HSA to reduce taxable income and save for medical expenses.
Donate to Charity: If you’re able to donate to charity, do so before the end of the year to claim a deduction on your 2024 taxes. You are allowed to deduct cash donations to qualified charities up to 60% of your adjusted gross income, which is your total gross income minus certain deductions.
Convert to a Roth IRA: Consider converting some or all of your traditional IRA into a Roth IRA. Although you may pay income tax on the amount of the Roth conversion, the following growth is tax-free in a Roth IRA.
Consult with a Tax Professional: Working with a tax professional can help you navigate the best strategies for year-end tax cutting. JTS Associates CPAs is here to help. Contact us today at (516) 877-5900.
