I wrote a similar blog last year but I think it is important to remind people that…

There are still tax savings strategies, for tax year 2017, you can implement before the April 17th tax deadline. Two major opportunities, which I have outlined in further detail below, include contributing to a Health Savings Account, and contributing to an IRA.

1. CONTRIBUTIONS TO A HEALTH SAVINGS ACCOUNT

If you are employed, and have the option for a High Deductible Health Plan, you qualify for a Health Savings Account (HSA). Funds in an HSA account do not expire and can be used even after you leave your place of employment.

You have until the 4/17 deadline to make contributions to your HSA Account.

Making a contribution:HSA
Typically contributions to an HSA are made through payroll. Now that we are past the end of 2017 you will need to make the contribution personally.

To make these contributions you can:

Contribution Limits:

2. CONTRIBUTIONS TO AN IRA

There are three different types of IRA accounts (Traditional IRA, Roth IRA and SEP IRA) all with specific requirements to be aware of.

You have until the 4/17 tax deadline to make contributions to your traditional and ROTH IRA accounts.  If you extend, you have until the extension deadline of 10/15 to make contributions to your SEP IRA account. 

Making a contribution:


Contribution limits:

Although you cannot receive a deduction on your IRA contribution if your income level is above $119,000, you do have the option to contribute to a nondeductible Traditional IRA.  If you choose to contribute to a nondeductible Traditional IRA you may have the option to convert to a Roth IRA. Everyone’s situation is unique, and dependent on individual circumstances, so please contact your professional advisor to learn more. 

THINKING AHEAD FOR THE 2018 TAX YEAR

You can start contributing sooner to your HSA and IRA accounts. For the 2018 tax year, there is an increase of $50 to the HSA contribution limit for a single plan to $3,450 and family plans will increase $150 to $6,900.

The 401K deferral is increasing for the first time in a few years up to $18,500 and the catch up contribution remains the same at $6,000. If you are turning 50 this year, even if you have not turned 50 yet, you can start making catch up contributions now. To make a catch up contribution contact your Human Resource Department at your place of employment.

If you have children, grandchildren, nieces and nephews, etc. and want to start investing in their college education you can contribute to a 529 plan. This money grows tax free, and there are no implications as long as you use it for a qualified tuition expenses.

To learn more about last minute Tax Savings Opportunities contact a member of DKB's Personal Tax Team today!