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Tag: IRA

  • Year Round Tax Savings

    Year Round Tax Savings

    Year-Round Tax-Saving Strategies to Lower Your 1040 Taxes

    Saving money on taxes isn’t just for tax season—it requires year-round planning. Here are proactive strategies to help you lower your 1040 tax bill and maximize deductions throughout the year.

    1. Adjust Your Tax Withholding Early in the Year

    ✅ If you received a large tax refund, you’re overpaying taxes throughout the year.
    ✅ If you owed taxes, you may need to increase withholdings or make estimated payments.
    ✅ Use IRS Form W-4 to adjust your withholdings at work.

    🔗 Related: Understanding Your 1040 Tax Return

    2. Max Out Retirement Contributions

    ✅ 401(k) contributions reduce taxable income—limit for 2024 is $23,000 ($30,500 if 50+).
    ✅ Traditional IRA contributions are tax-deductible—limit is $7,000 ($8,000 if 50+).
    ✅ Self-employed? Consider a Solo 401(k) or SEP IRA.

    🔗 Related: How 2025 Contributions to IRA & 401(k) Can Reduce 2024 Taxes

    3. Take Advantage of Tax Credits

    ✅ Earned Income Tax Credit (EITC) – Available to low-to-moderate income taxpayers.
    ✅ Child Tax Credit (CTC) – Up to $2,000 per child.
    ✅ Saver’s Credit – For contributing to retirement accounts.

    🔗 Related: Your Guide to Tax Credits & Deductions

    4. Track and Deduct Work-Related Expenses

    ✅ Self-employed? Deduct business expenses like home office, internet, and vehicle costs.
    ✅ Employees working remotely? Check if you qualify for home office deductions.
    ✅ Freelancers and side hustlers should keep receipts and mileage logs.

    🔗 Related: How Small Business Owners Can Reduce Their Tax Burden

    5. Contribute to a Health Savings Account (HSA) or Flexible Spending Account (FSA)

    ✅ HSA contributions are tax-deductible, grow tax-free, and withdrawals for medical expenses are tax-free.
    ✅ FSA funds are pre-tax but must be used within the year.

    🔗 Related: The Health Savings Account (HSA): A Triple Tax Advantage

    6. Harvest Capital Losses to Offset Gains

    ✅ Sell underperforming stocks to offset capital gains taxes.
    ✅ Can offset up to $3,000 in ordinary income per year.

    🔗 Related: IRS Tax Law Changes for 2025

    Final Thoughts

    Lowering your tax bill requires planning all year long. Take advantage of deductions, credits, and tax-saving investments to keep more of your money.

    🚀 Next Steps:

    • Adjust your tax withholding today.
    • Contribute to retirement and HSA accounts.
    • Keep organized records of expenses and deductions.

    🔗 Need more tax guidance? Visit our Tax-Saving Blog & Expert Insights.

  • Savers Credit Retirement

    Savers Credit Retirement

    How to Claim the Saver’s Credit for Retirement Contributions

    The Saver’s Credit is an overlooked tax benefit that rewards low- and moderate-income taxpayers for saving for retirement. This credit directly reduces your tax bill, making it easier to build long-term wealth while lowering your 1040 taxes.

    1. What Is the Saver’s Credit?

    ✅ A tax credit worth up to $1,000 ($2,000 for married couples).
    ✅ Applies to 401(k), 403(b), IRA, and some other retirement contributions.
    ✅ Helps lower-income taxpayers offset the cost of saving for retirement.

    🔗 Related: How Retirement Contributions Can Reduce Your 1040 Taxes

    2. Saver’s Credit Income Limits (2024)

    Filing Status50% Credit (Max)20% Credit10% CreditNot Eligible Above
    Single$0 – $23,000$23,001 – $25,000$25,001 – $36,500$36,501+
    Married Filing Jointly$0 – $46,000$46,001 – $50,000$50,001 – $73,000$73,001+
    Head of Household$0 – $34,500$34,501 – $37,500$37,501 – $54,750$54,751+

    🔗 Related: Traditional vs. Roth IRA: Which One Lowers Your Taxes More?

    3. Who Qualifies for the Saver’s Credit?

    ✅ Must be 18 or older and not a full-time student.
    ✅ Cannot be claimed as a dependent on someone else’s tax return.
    ✅ Must contribute to a qualified retirement account.

    🔗 Related: Self-Employed Retirement Plans: SEP IRA, Solo 401(k), & More

    4. How Much Can You Get?

    The credit is worth 50%, 20%, or 10% of your contributions, depending on income.

    ✅ Maximum Contribution for Credit:

    • $2,000 per person ($4,000 for married couples filing jointly).
    • Couples could receive up to $2,000 in total tax savings.

    🔗 Related: How 2025 Contributions to IRA & 401(k) Can Reduce 2024 Taxes

    5. How to Claim the Saver’s Credit

    ✅ File Form 8880 (Credit for Qualified Retirement Savings Contributions).
    ✅ Report IRA, 401(k), or 403(b) contributions on your 1040 tax return.
    ✅ Use tax software or a preparer to calculate the credit.

    🔗 Related: The Health Savings Account (HSA): A Triple Tax Advantage

    Final Thoughts

    The Saver’s Credit is a valuable tax break for those saving for retirement. If you qualify, it’s like getting free money for your future while lowering your tax bill today.

    🚀 Next Steps:

    • Check if your income qualifies for the Saver’s Credit.
    • Make 401(k), IRA, or 403(b) contributions before the tax deadline.
    • File Form 8880 to claim your credit.

    🔗 Need more tax-saving strategies? Visit our Retirement Tax Savings Guide.

  • IRA 401k Contributions 2024

    IRA 401k Contributions 2024

    How 2025 Contributions to IRA & 401(k) Can Reduce 2024 Taxes

    Did you know you can still make IRA and 401(k) contributions in 2025 that will lower your 2024 tax bill? Here’s how to take advantage of last-minute retirement contributions to reduce taxable income and maximize deductions.

    1. Traditional IRA Contributions (Until April 15, 2025)

    ✅ Contributions made by April 15, 2025 can be applied to your 2024 taxes.
    ✅ Deductible contributions lower your Adjusted Gross Income (AGI).
    ✅ Maximum contribution: $7,000 ($8,000 if 50+).

    🔗 Related: Traditional vs. Roth IRA: Which One Lowers Your Taxes More?

    2. Self-Employed Retirement Contributions (Extended Until Tax Filing Deadline)

    ✅ Solo 401(k), SEP IRA, and SIMPLE IRA contributions can be made up to your tax filing deadline (including extensions).
    ✅ SEP IRA contributions: Up to 25% of net earnings, max $69,000.
    ✅ Solo 401(k) employee contributions: Must be made by Dec 31, 2024, but employer contributions can be extended.

    🔗 Related: Self-Employed Retirement Plans: SEP IRA, Solo 401(k), & More

    3. Employer 401(k) Contributions (Deadline: Dec 31, 2024)

    ✅ Employee 401(k) contributions must be made by the end of 2024.
    ✅ Max employee contribution: $23,000 ($30,500 if 50+).
    ✅ If eligible, check if your employer allows after-tax 401(k) contributions for tax-free Roth conversions.

    🔗 Related: How Retirement Contributions Can Reduce Your 1040 Taxes

    4. Can You Still Contribute to a Roth IRA for 2024?

    ✅ Yes! Roth IRA contributions for 2024 can be made until April 15, 2025.
    ✅ Roth contributions don’t lower your current-year taxes, but they provide tax-free withdrawals in retirement.

    🔗 Related: The Saver’s Credit: How to Get a Tax Break for Retirement Contributions

    5. HSA Contributions for 2024 (Tax Deductible Until April 15, 2025)

    ✅ Health Savings Account (HSA) contributions are tax-deductible, reducing taxable income.
    ✅ Max contributions: $4,150 (self-only), $8,300 (family), plus $1,000 catch-up for 55+.

    🔗 Related: The Health Savings Account (HSA): A Triple Tax Advantage

    Final Thoughts

    Don’t miss out on last-minute IRA, 401(k), and HSA contributions that can still lower your 2024 tax bill.

    🚀 Next Steps:

      • Contribute to a Traditional IRA by April 15, 2025.

      • Max out self-employed retirement plans before filing.

      • Consider an HSA contribution for additional tax savings.

    🔗 Need more tax-saving strategies? Visit our Retirement Tax Savings Guide.

  • Savers Credit

    Savers Credit

    Retirement

    The Saver’s Credit: How to Get a Tax Break for Retirement Savings

    The Saver’s Credit rewards low- to moderate-income workers who contribute to retirement accounts like a 401(k) or IRA. Here’s how it works and how you can qualify.

    How Much Is the Saver’s Credit Worth?

    The credit is 10%–50% of your contributions, up to $2,000 ($4,000 for married couples).

    Income Level (2024)Credit Percentage
    Single: $0 – $23,00050%
    Single: $23,001 – $25,00020%
    Single: $25,001 – $36,50010%
    Married Filing Jointly: $0 – $46,00050%
    Married Filing Jointly: $46,001 – $50,00020%
    Married Filing Jointly: $50,001 – $73,00010%

    🔗 Related: Your Guide to Tax Credits & Deductions

    Who Qualifies for the Saver’s Credit?

    To claim the credit, you must: ✅ Be 18 or older and not a full-time student.
    ✅ Not be claimed as a dependent on someone else’s return.
    ✅ Contribute to a 401(k), 403(b), IRA, or similar plan.
    ✅ Have income within the qualifying limits (see table above).

    🔗 Related: Tax Credit vs. Deduction: What’s the Difference?

    Which Retirement Accounts Qualify?

    The Saver’s Credit applies to contributions made to:

    • 401(k), 403(b), 457 plans
    • Traditional & Roth IRAs
    • SIMPLE & SEP IRAs
    • Self-employed retirement accounts (Solo 401(k), Keogh plans)

    🔗 Related: Earned Income Tax Credit (EITC) Explained

    How to Claim the Saver’s Credit

    ✅ Report contributions on Form 8880 (Credit for Qualified Retirement Savings Contributions).
    ✅ File Form 1040 or Form 1040-SR (not available on 1040-EZ).
    ✅ Use IRS Free File or tax software to claim the credit.

    🔗 Need filing help? Tax Filing Shortcuts

    Final Thoughts

    The Saver’s Credit is an often-overlooked tax benefit that can help workers save for retirement while lowering their tax bill.

    🚀 Next Steps:

    • Check if you qualify using the IRS Saver’s Credit Tool.
    • Contribute to a retirement account before the deadline.
    • File correctly to claim your credit and maximize savings.

    🔗 Looking for more tax benefits? Visit our Tax Credit Guide.