Ten days left to file or extend. The tax man will find you
It's funny how fast April 15th sneaks up on us. The tax deadline looms like a monster under the bed... except this monster wants your money, not your toes. But fear not, procrastinators! With a little hustle and these last-minute maneuvers, you can turn tax day into triumph day or maybe just feel a little less sting in your wallet.
Supercharge your IRA:Â This is a very common question I get asked when I conduct company-sponsored retirement plan education; the question is, can I save beyond my company's 401(k)? The answer is, of course, you can! Did you know you can still contribute to a Traditional or Roth IRA for 2023 up until you file? That's right, it's like a magic savings account that lowers your taxable income. Think of it as a tax shelter you can build in ten days! Research which IRA is best for you (ahem, or talk to one of the experts at the firm), then max it out (or at least contribute what you can) before the deadline. A less stressful way to fund these accounts is to throw a little money into the account every month. No scrambling at the last minute and you won't notice a thing every month.
Spousal IRA: The Secret Weapon:Â Â I am by no means encouraging you to use your spouse as a weapon or a shield from the IRS or any other scary monsters you might be afraid of. Does your spouse lounge on the couch while you rake in the dough? Some run the house and manage all the activities and sports for the kiddos. Whatever it may be, there is a ton of value in a stay-at-home parent - trust me! The IRS views things a little differently; it's not considered taxable income if no one is paying them. (Don't worry, we've all been there). Here's the good news: you can open a spousal IRA and contribute to their retirement, even if they don't have earned income! It's a win-win: you get a tax deduction, and they get a nest egg for later. I would consider this a real score; tax-free income and a deduction against the working person's income. Pretty near gold if you ask me.
Calling All Business Bosses! This is prime time to re-evaluate your employee retirement plan offerings or lack thereof. A sweet retirement plan can be a major perk for your team, and guess what? It benefits you too! Offering a 401(k), SIMPLE IRA with a company match incentivizes employees to save, lowers your payroll taxes, and makes your company a superhero in the fight for financial security. Don't overlook this. It's easy to say that it's just another expense, but your employees are depending on you to help them have a savings vehicle to plan for tomorrow. Another reason you'll want to consider an employer-sponsored retirement plan, you'll be required to offer something very soon. New York state joins others in a plan to force employers to offer an option that will allow their hard-working employees to save for their retirement. Details from the state could be expected over the next year or two. It's a great idea, but now they have to figure out the logistics like how to police and enforce their regulations.
Remember:Â Even if you can't maximize everything, every little bit counts. The compounding effects of habitual savings are unimaginable. I have yet to hear one of my retired clients tell me they wish they never saved in their 401(k). It's usually just the opposite. They wish they could've increased things over time even if just by a small amount. Also, be sure to gather those receipts, dust off your W-2s, and consider using tax filing software to streamline the process if you have a basic return. Don't fall victim to the pennywise pound foolish mentality because it's going to cost a few hundred dollars more to have a tax expert guide you through the planning and execute the filing of your return. We've all been there and done that. Don't do it with one of the most impactful parts of your life, your take-home income. Saving a few hundred dollars to miss thousands or more in deductions or tax-saving strategies, makes zero financial sense!
Bonus Tip:Â While you're at it, treat yourself to a celebratory dance after you file. You deserve it, tax warrior!
If you haven't checked out my PennyWise Financial Podcast, watch a clip from my latest episode. You'll see topics that cover all sorts of things that tie into financial decisions or goals we plan for each and ever day with our clients.
Scroll down a little past the clip to watch the entire episode. It's available on all major podcast platforms like Apple Podcasts, YouTube Music, Spotify, Amazon Music, and YouTube.
👇Or click below to watch the full Episode
Everyone wants to offer advice. We hope you have the right person. A trusted person to guide you on your path to achieving your goals. If you're not working with the right team or want a second opinion, we hope you consider our services. Follow our content to learn more about our process, and investment philosophy and hear real-life accounts of what our clients are dealing with and how we help them.
And that's only the beginning. Reach out and schedule a consultation to discuss your situation. We'll walk you through your options and help you make the right choice for your goals. Click below to listen to the latest PennyWise Financial Podcast and hear more commentary on the stuff you need to know, and much more. Check out another episode below or view our catalog of videos by clicking the button linked to our channel.
Want to learn more? Follow our latest market commentary, firm updates, or anything financial via our blog, Podcast, or Videos.
