Get ready for tax year 2023 now

The Street

Making some smart moves this year can help you build your savings and lower your taxes in April. CPA and TurboTax expert Lisa Greene-Lewis explains how.

Transcript

00:00 (upbeat music)

00:02 - So April 2024 might seem like a lifetime away,

00:08 but there are things you can do now

00:10 to help save you money on that tax return.

00:13 Lisa Green Lewis, TurboTax expert and CPA

00:15 is with us right now.

00:16 Look, no one wants to think about this stuff,

00:18 but it's helpful to get ahead, isn't it?

00:21 - It's very helpful.

00:24 You know, things you do all year long relate to your taxes.

00:29 So definitely I would recommend

00:33 investing in tax deferred accounts.

00:36 So that's like your 401k, you know,

00:40 because by investing in it,

00:42 you're lowering your taxable income,

00:45 and then it's a win,

00:46 especially if you work for an employer who matches.

00:50 You're increasing your nest egg and building your retirement

00:55 and also lowering your taxes.

00:58 - And actually, I think that's such an important point

01:00 right there, because so many people sign up

01:02 when they first get a job

01:03 and put a percentage in their 401k and then forget about it.

01:06 Odds are very good.

01:06 You probably could increase it.

01:08 You can try to hit the max and try to take the maximum.

01:12 And like you said, it gets your tax bill down.

01:14 It increases your nest egg in retirement.

01:17 Also increasing your nest egg could be that saver's credit.

01:20 - Right, this is a little known credit.

01:23 So the IRS, they state that one out of five people

01:27 miss this credit, and it's up to $2,000

01:31 for married filing jointly and 1,000 if you're single.

01:35 And it's just a credit you automatically get

01:37 just for investing in your retirement.

01:40 - Which is amazing, right?

01:42 Which as a reminder, it's 22,500,

01:45 30,000 if you're 50 and older in your 401k.

01:48 And then your IRA,

01:51 you could still put money in an IRA as well, can't you?

01:55 - Right, so your IRA, you can invest up to $6,500

02:00 and it's 7,500 if you're married filing,

02:04 I mean, 50 and over.

02:06 And that is for tax year 2023.

02:10 And one thing to keep in mind that you can invest

02:12 in your IRA up to the tax deadline

02:17 and make an impact on your taxes and lower your taxes.

02:22 So that's one thing to keep in mind.

02:23 That is one of the only tax benefits you could get

02:27 after December for the tax year that you're filing.

02:32 - Right, 'cause your 401k ends at 1231.

02:36 But that's super important also too,

02:37 I think people should remember

02:38 to use their health savings accounts.

02:39 You can use that as a savings vehicle as well

02:42 and sock some money away.

02:43 All these things are really good to look at

02:46 this time of year 'cause it gives you the back half

02:48 to make some changes.

02:52 - Exactly, yeah, your health savings account,

02:54 you can invest up to $3,850,

02:59 for a single plan and a family plan is $7,750.

03:05 - So start looking at that.

03:07 And I suppose also before I let you go,

03:09 the last thing you can start looking at too

03:11 are your gains and losses.

03:13 If you are an active trader of sorts,

03:15 maybe you have a lot of gains,

03:17 maybe you start looking to harvest losses.

03:19 People start to do that,

03:20 once the fall comes around for sure.

03:22 - Right, that's another great tip to do

03:26 by the end of the year.

03:28 Look at some of your losing stock.

03:31 And if you sell them,

03:33 you'll be able to offset against your capital gains.

03:36 And then also you'll be able to offset up to $3,000

03:39 against ordinary income, like your wages.

03:43 So that is really helpful.

03:45 And also, TurboTax, we have TurboTax Tax Caster,

03:50 which helps you plan before the end of the year.

03:53 You can put scenarios in,

03:56 put your different situations in

03:59 and see how you can maximize your refund

04:02 or lower the taxes you owe.

04:04 - Yeah, that's actually a great tip,

04:06 especially if you're coming up on a year-end bonus

04:08 or something, you can manage your tax bill.

04:11 Lisa Green-Lewis, TurboTax expert and CPA,

04:13 thank you so much for your insight.

04:15 - Thank you for having me.

04:16 (upbeat music)

04:19 (upbeat music)

Category

Transcript

Recommended