Business
5 Must-Do Savings Strategies To Optimize Your Tax Returns
Tax season is quickly approaching, and nobody wants to have additional debt when it comes time to file in April. You can, however, use a variety of clever techniques to lower your tax liability and overall tax debt.
Here are five strategies to increase your tax refunds.
- Make the Most Contributions to Your Retirement
You can postpone paying income taxes if you contribute the maximum amount to your retirement account or accounts. IRAs and 401(k)s are two examples of retirement funds that offer some of the best ways to deduct taxes. You’ll be saving for the future in addition to lowering your tax burden.
In 2023, the maximum allowable deduction for 401(k) contributions is $22,500, exclusive of employer contributions. You can add extra catch-up contributions to your 401(k) in 2023 if you’re over 50. The maximum amount you can contribute is $7,500 annually, or $30,000. The highest tax-deductible contribution to an IRA for 2023 is $6,500, or $7,500 if you are over 50.
- Postpone bonuses or payments
Consider requesting a deferral if you anticipate receiving a bonus or additional payment near the end of the tax year, regardless of the tax year. This could be a lump sum payment as a freelancer or a holiday bonus from your employer. Why are the payments being postponed until the next year? Your tax obligation on this additional income will be postponed until the next tax year.
- Make Strategic Business Investments
If you purchase additional office supplies, a computer, or a new desk for the upcoming year, you can deduct a sizable amount if you do so before the year ends. To save money on taxes now and ensure you have the supplies you need in time for the upcoming year, think about making large business purchases before the end of the year.
- Increase Your HSA Contribution
In case your medical insurance plan has a higher deductible, you have the option to make additional contributions to your health savings account (HSA). You can deduct your HSA contributions from your taxes and use them to cover essential medical costs. Your health insurance plan must have high deductibles that either match or exceed the IRS’s required amounts, and it must have the highest annual out-of-pocket cost ceilings that comply with IRS regulations for you to be eligible for an HSA.
- Learn More About Tax Credits
Your tax liability can be reduced by a variety of tax credits. To mention a few, there is the American Opportunity Tax Credit, Child Tax Credit, and Earning Income Tax Credit. To minimize your tax liability and claim all of the available tax credits, it’s critical to conduct some research or consult with a tax professional.
-
Tech3 weeks ago
12 Essential Marketing Tools Every Small Business Owner Should Try
-
Business4 weeks ago
Smart Strategies to Stay One Step Ahead in a Competitive Market
-
Business4 weeks ago
9 Low-cost Marketing Strategies and Ideas That Offer a Good Return on Investment for Small Businesses
-
Startup2 weeks ago
Essential Tips for New Retail Business Owners to Succeed in a Competitive Market
-
Tech4 weeks ago
How Small Business Can Start with Marketing Automation Software
-
Tech6 days ago
Adobe Partner with Benny Blanco to Help Small Business Branding in ‘Create Anything’ Campaign
-
Business3 weeks ago
7 Essential Investment Success Tips Every Investor Should Know: How to Beat the Market
-
Tech3 weeks ago
Google’s Change to Google Local Services Ads Could Have an Impact on Millions of Small Businesses