Can you believe that 2018 is almost over? Before we bring this year to a close, there are some tax-related things you need to do. Taking our advice can lead to a lower tax bill and extra cash in your wallet if you move quickly.
Beef up your retirement savings
There are a couple good reasons to contribute as much as you can to your 401k before the year is out. The first being that any contributions you make will lower your taxable income which in turn will reduce your tax bill. For 2018, the contribution limit is capped at $18,500. However, those aged 50 or older are allowed make catch-up contributions up to $6,000. Another good reason to beef up your retirement savings is because many employers offer to match a portion of your contributions. That’s free money you’re leaving on the table if you’re not contributing enough to receive the full benefit.
Contribute to an HSA
Health Savings Accounts (HSA) allow you to save money for medical expenses not covered by your plan such as deductibles and copays. The best part is your contributions are 100% tax deductible. To qualify for an HSA, you must be enrolled in a high deductible health plan. If your plan covers just you, you’re allowed to contribute up to $3,450 to an HSA. For family coverage, you can contribute up to $6,900. As a bonus, those 55 or older have an additional $1,000 catch-up contribution limit. When you file with ezTaxReturn, we make it easy to report your HSA contributions on your tax return.
Spend your FSA balance so you don’t lose it
If you have a Flexible Spending Account (FSA), you must use your balance by December 31st or risk losing it. Some employers offer a grace period but you’re better off using it up to be on safe side. Here are a handful of ways you can spend your FSA dollars:
- Blood pressure monitors
- Breast pumps and supplies
- Contact lenses and solutions
- Hearing aids and batteries
Take your required minimum distribution
Once you turn 70 1/2, you must start taking your required minimum distributions (RMD) from your retirement accounts. You better mark your calendar, set up a reminder in your phone or do whatever else it takes to remember because the penalty is expensive. Failing to withdraw the appropriate amount will result in a 50% penalty and we know you won’t like that.
Sell bad stocks to offset gains
Sometimes you pick stocks and they do well, other times your decision blows up in your face. If you own any stocks that have lost money, you can sell them and deduct up to $3,000 on your tax return. This can help offset your capital gains and other income. Any losses exceeding the $3,000 limit can be carried over to following years.
Pre-register with ezTaxReturn for a tax time discount
Everyone enjoys saving money when they can. Pre-register now with ezTaxReturn and you’ll receive a special discount when you do your taxes with us. It’s FREE to sign up and there are no coupon codes to remember. Just use the email address you pre-registered with and the discount will be automatically applied.