Dear WSP Family & Friends,
Tax Day falls on a holiday this year, so make sure you’re prepared to file your 2021 taxes by the April 18th deadline. Remember, if you file an extension and owe money, you must make income tax payments by the deadline to avoid interest and penalties.
You still have until your tax filing date to make tax-deductible contributions. This month, we challenge you to make sure you’ve taken advantage of these 3 tax saving strategies:
Contribute to Retirement Accounts
Retirement fund contributions offer considerable tax benefits. It’s recommended to contribute either the full amount allowed, annually or the maximum amount that will be matched by your employer to company-sponsored 401(k) plans. Traditional IRAs are usually pre-tax contributions, which lower your taxable income for the current tax year.
Contribute to Health Savings Accounts
If you are in a position to do so, ensure that you’ve maximized your HSA contribution prior to filing your taxes. Families can contribute up to $7,200, and single individuals can contribute up to $3,600. If you won’t spend the full contribution within the year, the funds roll over and continue to grow tax free.
Deduct Charitable Contributions
Generally, you can only deduct charitable contributions on your taxes if you itemize your deductions up to 60% of your adjusted gross income. For the 2021 tax year, charitable givers can deduct up to $300 of cash donations and will not have to itemize, which makes it both easier to give and save.
Almost all financial decisions have a tax impact. The good news? Our team is here to help. If you would like us to evaluate tax savings strategies, please contact us.
Make an appointment today by replying to this e-mail or calling our office.
Sincerely,
Paul Allen