Year-end tax tips to increase your refund

Year-end tax tricks to improve your refund (TV-PG; 4:04)

Take some tax-saving actions now because the 12 months winds down. CPA and TurboTax knowledgeable Lisa Greene-Lewis explains what strikes you need to make now to ease your tax burden come April. Watch the video above or learn the transcript under to study extra. 

Video transcript:

Tracy Byrnes: So this 12 months is flying by, and earlier than we get to the tip, there is a bunch of issues you possibly can do to attenuate your tax hit subsequent April. Lisa Greene-Lewis, TurboTax knowledgeable and CPA, is right here with us proper now. Look, nobody needs to speak about taxes, however we actually needs to be desirous about it. And there is a bunch of issues we may do. The greatest, in fact, that folks all the time take into consideration is maximizing itemized deductions, and that is after we take into consideration charity.

Lisa Greene-Lewis: Yes, you wish to maximize your deductions, and for those who’re shut, about 90% of individuals get the usual deduction, which for tax 12 months 2023, it is $13,850 for those who’re single. Married submitting collectively, it is $27,700. But for those who’re near with the ability to itemize, which implies you’ll be over that commonplace deduction, you would possibly wish to donate to charity since you would be capable to get a deduction for that. And then you definately can be ran into itemized deductions the place you might be able to declare extra deductions than simply the usual.

Tracy Byrnes: I all the time say, take into consideration your native police, firefighters, EMTs. Don’t neglect to donate to them earlier than the tip of the 12 months. We additionally talked about retirement accounts and maxing them out. What ought to folks know?

Lisa Greene-Lewis: For retirement accounts yearly, the quantity that you could contribute and max out, it will increase. So for 401(okay), you may max out at $22,500 contribution, and then you definately get an additional $7,500 for those who’re 50 and over. And then for an IRA, you may contribute as much as $6,500. An extra $1,000 for those who’re 50 and over.

So you actually wish to take into consideration that. And then for those who’re self-employed, you are able to do a SEP IRA, and that quantity is the lesser of 25% of your revenue or $66,000. And that may actually assist decrease your taxable revenue by making these strikes.

Tracy Byrnes: Yeah, and there is a bunch of calculators on the market, and TurboTax will help with this to indicate you ways a lot you will save. So it is actually necessary for folks to at the least mess around with the numbers and get a way of it. Also many, many firms provide well being financial savings accounts. What do folks must find out about that?

Lisa Greene-Lewis: Yeah, so a well being financial savings account, you may contribute as much as $3,850 for those who’re single, and a household plan is $7,750.

Tracy Byrnes: And folks ought to know if they do not use it, they may roll that and hold rolling it and use it nearly as one other financial savings car, deferred financial savings car, I ought to say. And lastly, begin desirous about your capital beneficial properties and losses. There’s been a bunch of market strikes this 12 months. So there’s received to be a approach to make the most of it.

Lisa Greene-Lewis: Right, when you have some shedding inventory, and it is simply not performing nicely, for those who promote it, simply do not forget that can use tax loss harvesting and offset these losses in opposition to your beneficial properties. And then you may offset as much as $3,000 of a web loss in opposition to your strange revenue like your wages.

Tracy Byrnes: How can we plan for 12 months finish? How can we hold observe of all this as a result of there’s rather a lot to know?

Lisa Greene-Lewis: TurboTax has TurboTax Tax Caster, and it helps you intend by the tip of the 12 months, and it provides you a way of the place you stand in your taxes, whether or not you are going to get a tax refund or whether or not you are going to owe it. By utilizing that software, you can also make good strikes by the tip of the 12 months that will help you maximize your refund or decrease what you owe.

Tracy Byrnes: Lisa Greene-Lewis, TurboTax knowledgeable, thanks for all of that.

Lisa Greene-Lewis: Thank you for having me.

Editor’s Note: The content material was reviewed for tax accuracy by a TurboTax CPA knowledgeable for the 2022 tax 12 months.