There's always a big push towards December 31 to maximize 401(k) contributions and tax loss harvesting. April 15 is the other big calendar event for American taxpayers; one most people dread, but which can offer some valuable savings and planning opportunities by being proactive.
Here are some things to keep on your radar between now and April 15:
Essential Tax Documents
Custodians of all investment accounts, as well as banks,
will publish and send you your tax forms. These documents will either be mailed
to you, or, for oXYGen clients, you'll receive an email from Wealthscape
letting you know the documents are available in PDF form for download,
depending on your delivery preferences. Note that tax documents are typically
published between early January and late February. Please note that forms 5498
(for qualified accounts such as Roth and Traditional IRAs) will come later,
specifically because of the April 15 deadline. NFS, LLC (the custodian of
accounts at oXYGen) will file these forms with the IRS on your behalf.
Other documents to have on your radar for filing (not-inclusive):
- W-2 from your employer
- 1099s, reporting dividends, interest, and capital gains for non-qualified accounts
- 1099-Rs, reporting taxable distributions from pre-tax qualified accounts, as well as for non-taxable rollover distributions from one 401(k) plans to another, or to an IRA
- 1099-INT bank interest statements
- Mortgage interest statements
- Student loan interest statements
- Receipts from charitable donations
Always be sure to consult with your tax professional ahead of tax filing.
Additional Tax Savings Opportunities
The IRS gives you a grace period to make additional savings
for the prior year. If you do so before April 15, you can top off or make
contributions to the following accounts:
Traditional IRAs
·
Depending on your income, you may benefit from a
tax deduction on pre-tax Traditional IRA contributions. These accounts then
grow tax-deferred and are taxed upon withdrawal. The contribution limit for
2024 is $7,000 per person (or $8,000 for those aged 50 and above).
Roth IRAs
·
One of the most powerful long-term tax-preferred
savings vehicles, Roth IRAs grow tax-free and funds can be withdrawn tax-free
in retirement. The contribution limit for 2024 is the same as for Traditional
IRAs: $7,000 per person (or $8,000 for those aged 50 and above).
Health Savings Accounts (HSAs)
·
HSAs are another powerful tool in your
portfolio. Those who are insured by a high deductible major medical plan -
either through work or through the ACA healthcare exchange - can contribute
$4,150 for themselves or $8,300 for family coverage. These accounts are double
tax-free, meaning that contributions are tax-deductible, growth is
tax-deferred, and withdrawals for qualifying medical expenses are also
completely free of tax. We recommend leaving a baseline of cash in these types
of accounts to cover medical expenses, and investing the remainder to grow over
the long haul.
The first quarter is also a great time to review your
anticipated income and expenses to hone your monthly budget. That'll help to
ensure that you're on track to enjoy yourself to the fullest while also working
towards your long-term goals. Let us know how we can help you and your loved
ones breathe easier as we navigate tax time and beyond.
