Updated: Nov 3
Hey there, it's tax strategist Kate!
W2 employees, you're doing an amazing job – you went to school, worked hard, and now you're well compensated for your expertise.
But here's the thing: Uncle Sam, IRS, is always there, waiting to take a chunk of your paycheck. So, let's talk about keeping more of your hard-earned cash in the family.
First, let's chat about Health Savings Accounts (HSAs). If your company offers one, great! It's like a secret weapon. You can stash money in HSA's before taxes get their hands on it. Use these funds for doc visits, dental, vision, and more. I've even used my HSA for dental hygiene stuff and fancy toothbrushes. Plus, the HSA limit for 2023 is $3,850 for individuals and $7,750 for families.
Another nifty move is funding a 529 college savings account for your kid. In Alabama, you get a tax break for doing this. So, it's like saving and tax benefits in one. Don't let that opportunity slip through your fingers. Make your money work for you and your family!
Additionally, for those of you with a traditional 401(k), it's wise to contribute up to your company's match limit. This is essentially free money they're offering, and you don't want to leave it on the table.
If you're looking to save even more for your future, consider opening a solo 401(k) account. This option allows you to contribute beyond what your employer offers, and it can be a smart move for increasing your retirement savings. Just remember, every dollar you put into these accounts is another dollar you're shielding from the IRS.
Just remember, every dollar you put into these accounts is another dollar you're shielding from the IRS.