Tax season is here and the deadline to file is rapidly approaching. For retirees, or those approaching retirement, maximizing every last penny can be crucial. Yahoo Finance Senior Columnist Kerry Hannon has last-minute tax moves for retirement savers.
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Editor's note: This article was written by Nicholas Jacobino
Video Transcript
- Retirement savers, listen up. You still have time to make contributions that may lower your 2023 tax bill, and even better, bump up your retirement savings account. While most tax saving moves wrapped up by December 31, there are still ways that you can save. And Yahoo Finance's reporter Kerry Hannon is all over this one with the breakdown. Hey, Kerry.
KERRY HANNON: Hey, Brad, great to be here. Yeah, if you haven't made your contribution to your individual retirement account, your IRA, whether it's a Roth or a traditional IRA, you have until the 15th to put $6,500 away in that account. It's lopped right off your tax bill, or if you're 50 or older, you can put in an additional $1,000. So I think this is a fantastic way.
The traditional, you're going to get that tax reduction right away. With a Roth, you're going to pay the tax going in. But coming out, you're not going to pay that tax. So that's your choice, but that's your deadline. You also should consider adding to your health savings account if you have one. If you're in a high-deductible plan last year in 2023, you can set aside up to $3,850 in that account, or if you're doing a family plan, $7,750.
And what I love about HSAs is they're triple tax advantage. You don't pay tax going in. You don't pay tax as it increases in value or when you take it out for medical expenses. So invest that account if you possibly can. And finally, by all means, if you're getting a tax refund, don't go shaking your hands and saying, hey, I'm going to spend this. Why don't you take that money and put it right into one of your individual retirement accounts, your IRA accounts, and you can do that straight from your 1040.
