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5 Last Minute Tax Planning Tips

5 Last Minute Tax Planning Tips

March 21, 2023

Now that March has arrived, you might be getting ready to file your 2022 income tax return. It’s not a fun chore, but one that we must all do. But before you do, consider these five last-minute tax planning tips. They might save you a bit of money.

Contribute more to your IRA. Contributions to an Individual Retirement Account are tax deductible up to certain amounts, meaning you don’t owe income taxes on the money that you divert to this type of retirement account. Depending on where you fall within a tax bracket, you could even contribute enough to drop down one bracket and lower your overall tax rate.

If you don’t have an IRA, you still have time to open and fund one. Contributions must be made by the tax filing deadline in order to be counted on the previous year’s tax return.

Use the funds within your flexible spending account. Many flexible spending accounts must be used by December 31 each year, but some do allow for a grace period. Check with your human resources department to see if you can still spend this money before it’s gone for good.

Contribute to a health savings account (HSA). If you’re enrolled in a high-deductible, low-premium health insurance plan, you can open a health savings account by April 18. All of the money you contribute to the plan is tax deductible, and helps you budget for your own healthcare expenses.

Review your credit card statements from the previous year. Highlight anything that could be used as a business deduction, such as travel, meals, home office expenses, or purchases like electronics. These deductions can really add up.

File for an extension. If you’re simply not ready to file your taxes yet, file for an extension before the deadline. Rushing through your return is more likely to result in mistakes, so buy yourself more time and get it done correctly.

Remember, Aprile 18 is the deadline for filing your 2022 income tax return. Start strategizing now, so that you don’t get into a rush at the last minute.