It may seem like working extra hard to increase your finances only leads to sky-high taxes. If your 2023 resolution is to try and get your taxes under control, you may be able to use some of these tips.
Tax season is upon us, and you may be looking for tips on how to minimize your taxes this year. Most everyone felt the economic change over the past few years, and you might be looking for some advice. Depending on your situation, these tips might help.
1. Contribute to Your Retirement Account
There are two options available for retirement accounts — a traditional IRA or 401(k). With a traditional IRA, your contributions are tax-deductible, which means that you can deduct your total contributions from your taxable income which may lead to lower taxes.
If you already have a traditional IRA, consider the Roth IRA. Contributions in Roth IRA are not tax-deductible, however. You can grow and withdraw your money tax-free, though. This may increase your tax savings altogether.
2. Contribute to Your Health Savings Account
You may also contribute to a health savings account. Just like an IRA, contributions made to a health savings account (HSA) are tax-deductible. Any withdrawals for medical expenses are tax-free, too. HSAs also have no income limits and high contribution limits. This means that anybody could save as much as they want for healthcare.
3. Invest Your Savings
If you have had stagnant money in your account for a few years now, then it may be time to put that money to work. You may be able to grow your money through various investments like stocks and more. For instance, having investment products like bonds contributed in IRAs may significantly reduce your taxes.
4. File Taxes on Time
Make sure to file federal taxes on time as much as possible. If not, file for an extension before the deadline. Otherwise, you might receive high fines. Fines differ from one state to another. For better wealth management in Birmingham, be sure to file your Alabama state taxes on or before the deadline of Tuesday, April 18, 2023.
5. Get a Financial Checkup
You can never go wrong with consulting with a financial advisor. McClellan Wealth Management can review your current finances and provide advice.
Wealth Management With McClellan
You will want to review finances and taxes now for the next tax season. Although it may be too late to lower your 2022 taxes, talking with McClellan Wealth Management now may help minimize your 2023 taxes. Contact us today!
Advisory Services Network, LLC does not provide tax advice. The tax information contained herein is general and is not exhaustive by nature. Federal and state laws are complex and constantly changing. You should always consult your own legal or tax professional for information concerning your individual situation.