Differences

This shows you the differences between two versions of the page.

@@ Line 1: / Line 1: @@
+When the calendar turns toward December,|As December approaches,|With December on the horizon, many of us start thinking about what we can take action to lower our tax bill for the year that just ended.
+The good news is that there are a handful of "tax‑saving products" that are specifically designed to give you tax savings when you make the right investments.
+By understanding how each one works and when to use them, you can often reduce your taxable income by thousands of dollars—sometimes even more if you combine a few of the strategies.
+Below is a practical guide to the top recommended tax‑saving products for  [[http://www.voidofheroes.com/forums/member.php?action=profile&uid=60087|期末 節税対策]] year‑end planning. Each section details what the product is, how it saves you tax, key limits, and a quick checklist of when to consider it.
+(k) and 403(b) Contributions
+What It Is
+A 401(k) is an employer‑sponsored retirement plan that lets you shift pre‑tax dollars from your paycheck into a retirement account.|A 401(k) is a retirement plan sponsored by your employer that allows you to move pre‑tax dollars from your paycheck into a retirement account.
+A 403(b) works the same way for employees of public schools and certain nonprofit organizations.|A 403(b) functions similarly for staff at public schools and some nonprofit entities.
+How It Saves Tax
+Pre‑tax contributions reduce your taxable income in the year you make the contribution.|Contributing pre‑tax money lowers your taxable income for the year of contribution.
+Roth 401(k) options allow you to contribute after‑tax dollars that grow tax‑free and are tax‑free at withdrawal, but the contributions do not reduce taxable income now.|Roth 401(k)s let you put in after‑tax dollars that grow tax‑free and are tax‑free when you withdraw, but they don’t lower your taxable income today.
+Limits (2024)
+Traditional 401(k) / 403(b): $23,000 (or $30,500 if you’re 50+ and take a catch‑up contribution).|Traditional 401(k) / 403(b) limit: $23,000 ($30,500 if you’re 50+ and take a catch‑up).
+Roth 401(k) contributions are subject to the same limits.|Roth 401(k) limits match those of traditional plans.
+When to Use It
+If you’re close to the $23,000 ceiling, a year‑end contribution can shave up to that amount off your taxable income.|If you’re near the $23,000 limit, a year‑end contribution can cut that amount from your taxable income.
+If your employer offers a match, contribute at least enough to capture the full match—this is free money that also adds to your tax‑free retirement savings.|If your employer matches contributions, put in enough to get the full match—this free money also boosts your tax‑free retirement savings.
+Individual Retirement Accounts (IRAs)
+Traditional IRA
+Contributions are deductible up to the lesser of $7,500 or your earned income.|You can deduct contributions up to the lesser of $7,500 or your earned income.
+Deduction limits are phased out at higher income levels ($73,000 for single filers, $116,000 for married filing jointly in 2024).|The deduction phases out at higher incomes ($73,000 for single filers, $116,000 for married filing jointly in 2024).
+Roth IRA
+Contributions are made with after‑tax dollars, so there’s no deduction now.|You contribute after‑tax dollars to a Roth IRA, so you get no deduction today.
+Qualified withdrawals are tax‑free, making it a great long‑term tax‑saving vehicle.|With tax‑free withdrawals, it’s a solid long‑term tax‑saving tool.
+How It Saves Tax
+A traditional IRA deduction directly reduces your taxable income for the year.|Deducting a traditional IRA directly lowers your taxable income for the year.
+Even if you can’t deduct the full amount, you can still contribute to a Roth IRA and enjoy tax‑free growth.|If you can’t fully deduct, you can still put money into a Roth IRA and benefit from tax‑free growth.
+When to Use It
+If you’re under the income limits for a deductible traditional IRA, put as much as you can toward it.|If you’re below the income limits for a deductible traditional IRA, max it out.
+If you’re over those limits but still want to save for retirement, a Roth IRA is still worthwhile.|If you’re above those limits yet still wish to save for retirement, a Roth IRA remains beneficial.
+Health Savings Accounts (HSAs)
+What It Is
+An HSA is a tax‑advantaged account that you can fund with a high‑deductible health plan. Contributions can be pre‑tax (or tax‑deductible if made post‑tax), earnings grow tax‑free, and withdrawals for qualified medical expenses remain tax‑free.|An HSA is a tax‑advantaged account linked to a high‑deductible health plan. You can fund it pre‑tax (or tax‑deductible if made post‑tax), earn tax‑free growth, and withdraw tax‑free for qualified medical expenses.
+Limits (2024)
+Individual coverage: $4,150|Individual limit: $4,150
+Family coverage: $8,300|Family limit: $8,300
+Catch‑up contributions for age 55+: $1,000|Catch‑up for 55+: $1,000
+How It Saves Tax
+Pre‑tax contributions lower taxable income.|Contributing pre‑tax dollars reduces taxable income.
+Tax‑free growth and withdrawals for medical expenses mean you’re not paying taxes on the money you use for health care.|Because earnings and withdrawals for medical expenses are tax‑free, you avoid taxes on those funds.
+When to Use It
+If you have a high deductible plan, max out your HSA in December. Even a few thousand dollars can be a significant tax break.|If you have a high deductible plan, contribute the maximum to your HSA in December. Even a few thousand dollars can provide a big tax break.
+An HSA can also double as a supplemental retirement vehicle, as after 65, non‑medical withdrawals are taxed as ordinary income, similar to a traditional IRA.|An HSA can also double as a supplemental retirement vehicle, as after 65, non‑medical withdrawals are taxed as ordinary income, similar to a traditional IRA.
+Flexible Spending Accounts (FSAs)
+What It Is
+An FSA allows you to set aside pre‑tax dollars from your paycheck to pay for qualified medical or dependent care expenses. Unlike an HSA, the money is "use‑or‑lose" (though some plans offer a grace period or carryover).|An FSA lets you allocate pre‑tax dollars from your paycheck to cover qualified medical or dependent care expenses. Unlike an HSA, the funds are "use‑or‑lose" (though some plans offer a grace period or carryover).
+How It Saves Tax
+Contributions reduce taxable income right away.|Contributions lower taxable income right away.
+Withdrawals for qualified expenses come tax‑free.|Withdrawals for qualified expenses come tax‑free.
+Limits (2024)
+Medical FSA: $3,050|Medical limit: $3,050
+Dependent Care FSA: $5,000 per household|Dependent Care limit: $5,000 per household
+When to Use It
+If you anticipate regular medical or child‑care expenses, put as many into an FSA as permitted. The tax savings can be substantial, particularly if you’re in a higher bracket.|If you anticipate regular medical or child‑care expenses, put as many into an FSA as permitted. The tax savings can be substantial, particularly if you’re in a higher bracket.
+College Savings Plans
+What It Is
+A 529 plan serves as a tax‑advantaged savings tool for future educational costs. You contribute after‑tax dollars, but earnings grow tax‑free and withdrawals for qualified expenses are tax‑free.|A 529 plan is a tax‑advantaged vehicle for future educational costs. You contribute after‑tax dollars, yet earnings grow tax‑free and withdrawals for qualified expenses are tax‑free.
+How It Saves Tax
+State tax deduction or credit: Several states provide a deduction or credit for contributions (typically up to $4,000 for single filers and $8,000 for married couples in 2024). Some states permit deductions up to $8,000 individually or $16,000 jointly.|State tax deduction or credit: Several states provide a deduction or credit for contributions (typically up to $4,000 for single filers and $8,000 for married couples in 2024). Some states permit deductions up to $8,000 individually or $16,000 jointly.
+Earnings grow tax‑free, so you never pay taxes on the earnings.|Earnings grow tax‑free, so you never pay taxes on them.
+When to Use It
+If you’re saving for a child’s college, max out your state deduction or credit. Even a modest $5,000 can yield a $250–$500 tax break, depending on state rules.|If you’re saving for a child’s college, max out your state deduction or credit. Even a modest $5,000 can yield a $250–$500 tax break, depending on state rules.
+Even if you’re not in a high‑tax state, the federal benefit of tax‑free withdrawals remains worthwhile.|Even if you’re not in a high‑tax state, the federal benefit of tax‑free withdrawals remains worthwhile.
+Charitable Contributions
+What It Is
+Donating to qualified charities is deductible if you itemize on your tax return. Cash, property, and even out‑of‑pocket volunteer costs may qualify.|Donations to qualified charities are deductible if you itemize, including cash, property, and even out‑of‑pocket volunteer costs.
+How It Saves Tax
+The deduction lowers your taxable income by the donation’s fair market value.|The deduction lowers your taxable income by the donation’s fair market value.
+You can deduct up to 60% of AGI for cash donations, though the limit may be lower for some property types.|You can deduct up to 60% of AGI for cash donations, though the limit may be lower for some property types.
+When to Use It
+If you’re near the standard deduction and have substantial giving, itemize. A $2,000 donation can lower taxable income by the same amount.|If you’re near the standard deduction and have substantial giving, itemize. A $2,000 donation can lower taxable income by the same amount.
+Donating appreciated assets like stocks or real estate can eliminate capital gains tax and still offer a deduction.|Donating appreciated assets like stocks or real estate can eliminate capital gains tax and still offer a deduction.
+Real Estate Tax‑Advantaged Tools
+1031 Exchange
+Allows you to postpone capital gains taxes on the sale of investment property by reinvesting in a like‑kind property.|It lets you postpone capital gains taxes on selling investment property by reinvesting in a like‑kind property.
+Mortgage Interest Deduction
+Mortgage interest on your primary or secondary home is deductible up to $750,000 of loan principal for new mortgages in 2024.|Mortgage interest on your primary or secondary home is deductible up to $750,000 of loan principal for new mortgages in 2024.
+How It Saves Tax
+By using a 1031 exchange, you can significantly defer tax liabilities and free up cash for other investments.|1031 exchanges can significantly defer tax liabilities and free up cash for other investments.
+If you itemize, mortgage interest deduction lowers your taxable income.|Itemizing mortgage interest deduction lowers your taxable income.
+When to Use It
+If you plan to sell investment property, a 1031 exchange may be preferable to a straight sale.|If you plan to sell investment property, a 1031 exchange may be preferable to a straight sale.
+If your mortgage interest is high, determine if itemizing gives a better deduction than the standard deduction.|If your mortgage interest is high, determine if itemizing gives a better deduction than the standard deduction.
+Timing of Income and Deductions
+Accelerate Deductions
+If you’re near a higher tax bracket, consider paying a year‑end medical bill, donating to charity, or paying property tax in December to bring it into this year.|If you’re near a higher tax bracket, you might pay a year‑end medical bill, donate to charity, or pay property tax in December to bring it into this year.
+Defer Income
+If you can control when income arrives, such as bonuses or freelance work, postpone it to next year if you anticipate a lower bracket.|If you can control when income arrives, such as bonuses or freelance work, postpone it to next year if you anticipate a lower bracket.
+Putting It All Together: A Sample Year‑End Checklist
+Check your current tax bracket: Forecast your taxable income for the year and see how much can be lowered with each product.
+Max out retirement accounts: Contribute to your 401(k) (or 403(b)) and IRA up to the limits.
+Fund an HSA: If you have a high deductible plan, put as much as you can in the HSA.
+Use an FSA: If you expect qualifying medical or dependent care costs, allocate as much as permitted.
+Put money into a 529 plan: If you’re saving for education, take advantage of the state deduction or credit.
+Make charitable donations: If you itemize, plan any large donations before year‑end.
+Consider a 1031 exchange: If you’re selling investment property, use the deferral rule.
+Adjust timing of income: If possible, delay a bonus or large payment until next year.
+local taxes, and mortgage interest can influence itemizing decisions.
+Final Thoughts
+Year‑end tax planning isn’t about obscure loopholes; it’s about leveraging the tax code’s existing tools to lower what you owe.|Year‑end tax planning isn’t about obscure loopholes—it’s about using the tools the tax code already offers to cut the amount you owe.
+The items above are proven strategies that many overlook because they’re not obvious.|The products listed above are tried‑and‑true strategies that many overlook because they’re not obvious.
+By spending a few minutes evaluating how much you can put into each vehicle, you can usually cut your taxable income by thousands of dollars.|By taking a few minutes to assess how much you can contribute to each vehicle, you can often reduce your taxable income by thousands of dollars.
+Always remember that tax rules shift. It’s smart to consult a tax professional or financial advisor before making major decisions, especially if you have complex finances.|Always remember that tax rules change. It’s wise to consult a tax professional or financial advisor before making big decisions, especially if you have complex financial situations.
+Yet, with a clear plan and proactive mindset, you can transform the holiday season into a powerful tax‑saving opportunity.|But with a clear plan and a proactive mindset, you can turn the holiday season into a powerful tax‑saving opportunity.

wiki.spacecom.uz

User Tools

Site Tools

Differences

Page Tools