Here we are in November and we are already talking about taxes. For good reason, taxpayers must act now to take advantage of the 2022 tax strategies to adopt now to reduce their tax burden when filing in 2023.
“You want to start maximizing your pension contributions. You can contribute up to $20,500 and $27,000 if you’re 50 or older,” says Lisa Greene-Lewis, CPA and TurboTax expert. “And it’s a win-win if your employer matches your contribution.”
Greene-Lewis shares retirement strategies, investment tips and other tax strategies to consider now.
Read the full Q&A below or watch the video above.
Maximize pension contributions
Tracy Byrnes: So while no one wants to think about taxes at this time of year, there are some tactical steps you can take right now that could help lower your tax bill come April. Lisa Greene-Lewis, CPA and TurboTax expert, is with us right now to help us walk through some of them.
Lisa Greene-Lewis: Yes, you want to start maximizing your retirement contributions. You can contribute up to $20,500 and $27,000 if you are 50 or older. And it’s a win-win if your employer matches your contribution.
Tracy Byrnes: It’s incredible. And IRAs too. There is still an option to contribute to an IRA in many cases.
Lisa Greene-Lewis: Yes, the IRA is a great method to reduce your taxes. You can contribute up to $6,000 and $7,000 if you are 50 or older. And you can do it until the tax deadline while having an impact on your taxes.
Don’t worry about knowing these tax laws. TurboTax has you covered. You can come to TurboTax and completely hand over your taxes to a TurboTax Live tax expert and do your taxes from start to finish. Enjoy up to $20 extra off when you start with TurboTax Live.
Leveraged Health Savings Account (HSA)
Tracy Byrnes: Incredible, right? Same with your HSA, your health savings account. So many people don’t realize they could actually use this as a savings tool, not necessarily to pay medical bills.
Lisa Greene-Lewis: Yes, you can contribute up to $3,650 for your single plan and then up to $7,300 for a family plan. And many people also don’t realize that they can do it until the tax deadline in April of next year and have an impact on their taxes as well.
Don’t miss the savings loan
Tracy Byrnes: Savings credit, I think, confuses a lot of people. But by contributing to a retirement account, you might actually qualify.
Lisa Greene-Lewis: Yes, it is a little-known credit. The IRS reports that one in four people miss this credit. And it’s a credit you only get for investing in your retirement. And it’s up to $1,000 if you’re single, then $2,000 for a joint filing.
Tracy Byrnes: So everyone should check the Turbotax website for more information on this. Another thing no one wants to think about at this time of year is the deductions from their paycheck coming home, whether it’s monthly, weekly or otherwise. But if you owed a lot of money last year or got a big refund, maybe you want to adjust your deductions now, right, Lisa? That way you don’t get that big check. Why should the government have your money all year round?
Lisa Greene-Lewi: Yes and then just so you don’t have any surprises when you do your taxes, so if you made more money this year or got a big bonus, or weren’t where you expected when you did your taxes last year. You definitely want to adjust your withholding and you do so by filling out a W-4 form and giving it to your employer or payroll provider.
Tracy Byrnes: Right or go to HR and ask for help with this. And to say the market has been volatile is a huge understatement, isn’t it? But if you’ve been buying and selling and creating capital gains and losses, now is the time to check where you are, because then you can kind of work through the rest of the year to make up for it.
Lisa Greene-Lewis: Right. You need to check where you are. And if you have losing stocks that you don’t expect to go up, you can eventually sell them and you can offset the losses with your gains. And then you are also able to offset those losses with ordinary income like W-2 income up to $3,000. Another thing you can do is TurboTax. We have a TurboTax Tax Caster, where you can see where you stand with your taxes in advance and use it for tax planning. And then also, talked about adjusting your W-4. We have a tool to help you adjust your restraint.
Tracy Byrnes: The thing, Lisa, is that there’s so much to remember and know. And if you’re not taking notes right now, what should people do?
Lisa Greene-Lewis: One thing to remember. You do not need to know these tax rules. You can come to TurboTax and you can completely entrust your taxes to a live TurboTax expert, they will take care of your taxes from start to finish.
Tracy Byrnes: This is a good thing. And again, even if nobody wants to do it, you can do it on the beach with your phone. And this is something that will help you immensely in April. And finally, if you’ve made charitable donations, you need to keep track of your receipts and itemize and things like that.
Lisa Greene-Lewis: Yes, if you have made charitable donations and can itemize your deductions. So, you know, if you’re a landlord, landlords can usually detail. You can claim charitable contributions, especially for non-monetary items. Many people clean out their closets around this time, so it’s a great time to keep track of that. And TurboTax also has its deductible that helps you assess and track your contributions throughout the year.
Tracy Byrnes: Yeah, or if you have college kids leaving, you get rid of all their stuff and give it away. That’s what I did. Lisa Greene-Lewis, thank you for this great advice.
Lisa Greene-Lewis: Thanks.