5 deductions to reduce Taxes

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April is called the financial literacy month, it’s also a month to file your Taxes in United States. Here are some popular financial deductions that can help reduce your taxes

  1. 401K, 403(b) and most of the 457 retirement accounts

    These plans are popular employer offered contribution plans. The contribution to these accounts is $20,500 in 2022 and $22,500 in 2023. Over 50, catch up contribution is $6,500 in 2022 and $7,500 in 2023
  2. IRA Accounts

    If you don’t have an employer contribution plan, you can contribute $6,500 in your IRA account in 2023 up from $6,000 in 2022. Over 50 catch up contribution is $1000.
  3. Simple IRA

    Simple IRA are designed for small businesses and its employees. The amount individuals can contribute to Simple IRA account increased to $15,500 in 2023 from $14,000 in 2022. Over 50 contributions increased to $3,500 from $3,000.
  4. SEP IRA, Keogh plan and Solo 401K

    This plan is also for small businesses. In these plans, employees can contribute 25% of compensation or $66,000 in 2023 up from $61,000 in 2022. For Solo 401K, the contribution limit is $66,000 in 2023 up from $61,000 in 2022 or for over 50 add another $7,500 towards contribution.
  5. Healthcare savings (HSA)

    You can contribute to HSA account for tax deductions. This account is good way to pay for medical expenses if you have a high deductible health plan. The growth and capital gains in this account is also tax free provided the withdrawals are utilized for health care expenses.

Let us know should you have any questions on the accounts above by contacting Blue Aris. The 1st session of free education and assessment is free.