Year-end tax tips to increase your refund
There's plenty you can do before the end of the year that could save you big on taxes in April. Learn some smart moves to help you lower what you owe.
Transcript
00:00 (upbeat music)
00:02 - So this year is flying by.
00:05 And before we get to the end,
00:06 there's a bunch of things you could do
00:08 to minimize your tax hit next April.
00:10 Lisa Greene Lewis, TurboTax expert and CPA
00:13 is here with us right now.
00:14 Look, no one wants to talk about taxes,
00:16 but we really should be thinking about it.
00:17 And there's a bunch of things we could do.
00:19 The biggest of course, that people always think about
00:22 is maximizing itemized deductions.
00:24 And that's when we think about charity.
00:28 - Yes, you wanna maximize your deductions.
00:33 And if you're close,
00:35 about 90% of people will get the standard deduction,
00:40 which for tax year 2023, it's 13,850.
00:45 If you're single, marry filing jointly, it's 27,700.
00:50 But if you're close to being able to itemize,
00:54 which means you would be over that standard deduction,
00:57 you might want to donate to charity
01:00 because you would be able to get a deduction for that.
01:03 And then you would be bumped into itemized deductions
01:07 where you may be able to claim more deductions
01:10 than just the standard.
01:11 - I always say, think about your local police,
01:14 firefighters, EMTs, don't forget to donate to them
01:18 before the end of the year.
01:20 We also talked about retirement accounts,
01:22 maxing them out, what should people know?
01:25 For retirement accounts, every year,
01:28 the amount that you can contribute and max out, it increases.
01:33 So for 401(k), you can max out at 22,500 contribution.
01:38 And then you get an extra 7,500 if you're 50 and over.
01:45 And then for an IRA, you can contribute up to $6,500,
01:52 an additional 1,000 if you're 50 and over.
01:55 So you really want to think about that.
01:58 And then if you're self-employed, you could do a SEP IRA,
02:02 and that amount is the lesser of 25% of your income
02:07 or $66,000.
02:09 And that can really help lower your taxable income
02:13 by making those moves.
02:15 - Yeah, and there's a bunch of calculators out there,
02:17 TurboTax can help with this,
02:19 to show you how much you'll save.
02:20 So it's really important for people to at least play around
02:24 with the numbers and get a sense of it.
02:26 Also, many companies offer health savings accounts.
02:29 What do people need to know about that?
02:31 - Yeah, so a health savings account,
02:35 you can contribute up to 3,850 if you're single,
02:40 and a family plan is $77,750.
02:42 - And people should know, right?
02:46 If they don't use it, they could roll that
02:48 and keep rolling it and use it almost
02:49 as another deferred savings vehicle, I should say.
02:53 And finally, start thinking about your capital gains
02:56 and losses, right?
02:56 There's been a bunch of market moves this year,
02:58 so there's gotta be a way to take advantage of it.
03:01 - Right, if you have some losing stock
03:05 and it's just not performing well, if you sell it,
03:10 just remember that you can use tax loss harvesting
03:14 and offset those losses against your gains.
03:17 And then you can offset up to $3,000 of a net loss
03:22 against your ordinary income, like your wages.
03:27 - How do we plan for a year?
03:28 And how do we keep track of all this?
03:29 'Cause there's a lot to know.
03:31 - TurboTax has TurboTax Tax Caster,
03:34 and it helps you plan by the end of the year.
03:37 And it gives you a sense of where you stand in your taxes,
03:41 whether you're gonna get a tax refund
03:44 or whether you're gonna owe it, by using that tool,
03:47 you can make smart moves by the end of the year
03:50 to help you maximize your refund or lower what you owe.
03:53 - Lisa Green-Lewis, TurboTax expert.
03:55 Thank you for all of that.
03:57 - Thank you for having me.
03:58 (upbeat music)
04:01 (upbeat music)