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.
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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.
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