With 2020 just getting underway, many people are setting personal goals to get in shape, eat healthier and find ways to sneak in some more zzz’s. Let’s not forget the importance of setting financial resolutions critical for improving both short-term and long-term quality of life. Here are some quickfire tax planning tips to help you set smart financial goals and enjoy a more prosperous future.
- Discover ‘hidden’ funds in your financial plan. Do some digging and you just might strike gold in the form of a reworked tax refund! Take some time to review and adjust your withholdings to avoid significant tax refunds and instead have that extra money reshuffled into a 401(k) plan each month.
- Consider allocating funds into a ROTH IRA. A great way to accumulate wealth and save for retirement is through a ROTH IRA. A ROTH IRA is funded with after-tax amounts into a tax-deferred account and is a great tool for those that are currently in a lower tax bracket and expect to be in a high tax bracket at retirement. Instead of spending that $50 a month on a gym membership or healthy food delivery services, consider allocating those funds into a ROTH account and increasing your chances of financial success
- Contribute more to an HSA.Contributing to your HSA (health savings account) for health care expenses can be a valuable retirement tool as well since you may leave unused funds in the HSA to grow tax-free. HSAs have the benefit of pre-tax contributions, tax-deferred growth, and tax-free withdrawals. Plan for your future by contributing to your HSA now.
- Reach out for help. Setting realistic and reliable financial goals can be made difficult by the complicated role of taxes. No need to get overwhelmed. As always, our tax experts at Maddox Thomson & Associates are ready to be of service.
Best of luck and Happy New Year!