Make this year your best financial year yet by implementing some of these strategies. You still have an opportunity to reduce your tax debt if you act soon.
1. Contribute to your IRA for 2023. If you qualify, you can reduce your taxable income plus earn interest. Investing early in the year means more compounding of your money. The maximum contribution is $6500 or $7500 if you’re over 50 years old. Click here for more details.
2. Make a last minute estimated payment to your 2023 tax bill. According to the IRS’ rules for estimated payments, you have to pay 100% of last year’s liability or 90% of this years. If you are short for lats year’s estimated payment you will avoid interest and penalties if you can pay by Jan 15th.
3. Determine if you can itemize. With rising mortgage interest more people will be able to itemize than in years past. If this might be an option for you, talk with a tax expert to see what other things you might be able to itemize so your deduction will be higher than the standard deduction.
4. Be prepared to file your return or file for an extension on time . Be sure to file on time, the penalties and interest if you don’t file are much worse than not filing. File even if you don’t have the ability to pay – there are options for paying.
5. If you are getting a refund, apply extra money to starting an emergency fund. Keep the money in a high-interest savings account and grow interest until you need it.
