3 Moves That Will Slash Your Tax Bill This Year – dbrnews.com

Posted: September 20, 2020 at 10:51 pm

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Say you're in the 24% tax bracket, which means you pay that rate on your higher dollars of earnings. If you put $6,000 into a traditional IRA this year, you'll shave $1,440 off your tax bill, just like that. And of course the higher your tax bracket, the more savings you actually stand to reap.

Not everyone has access to a health savings account, or HSA, but if you're on a high-deductible health insurance plan this year, then it pays to see if you're eligible -- and put in as much money as possible. Your contribution limit for 2020 will depend on whether you're funding an HSA just for yourself or on behalf of a family. If it's the former, then you can put in up to $3,550 if you're under 55, or $4,550 if you're 55 or older. If you're funding an HSA on behalf of a family, these limits increase to $7,100 and $8,100, respectively.

As is the case with traditional IRAs and 401(k)s, the money you put into an HSA is income the IRS can't tax you on. You'll then have the option to use your HSA contributions to pay for qualified medical expenses, or invest the money you don't need immediately so it grows into a larger sum, just like you can invest an IRA or 401(k).

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3 Moves That Will Slash Your Tax Bill This Year - dbrnews.com

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September 20th, 2020 at 10:51 pm

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