Best end of the year tax tips
The 7 things CPAs say you still have time to do before December 31st
SALISBURY, Md- 2022 is winding down, but there are still things you can do before the clock strikes midnight on December 31st to get yourself in the best shape for your 2022 taxes.
CPA Mark Welsh of UHY Group says there are 7 steps that individuals can take the most important thing is to Maximize your 401K plan employee contributions and your Traditional IRA.
“That means $20,500 and $27,000 for 401K plan and $6,000 and $7,000 for Traditional IRAs,” Welsh said.
Welshes additional tips include deferring your income into 2023 and to postpone any Christmas bonuses into 2023 if possible.
Additionally, he says, that anyone with an HSA should use it as much as possible before the new year, and count those deductions.
Welsh tells 47ABC to be in the best shape; maximize your HSA plan, at $3,650 for single plans and $7,300 for family, being sure to add $1,000 for policyholders over 55.
And for those in Maryland, he says those on the states’ 529 plans can deduct up to $2,500 per year per account holder and that can be tied into students in the household with the Qualified Higher Education Expense deduction.
Welsh’s final set of tips deals with capital gains, and how to offset or minimize them completely.
Welsh says If you have capital gains look to harvest capital losses to make sure you’re not paying taxes on the money you lost in the market this year.
Another option according to Welsh, charitable donations, which now can be accepted via credit card, earning points, helping good causes and decreasing your tax burden.
He says to even further optimize taxes, filers can consider donating appreciated assets which will be deduced at the market value of the asset while eliminating capital gains tax.
“You should consider donating any appreciating assets that you may own, you would be able to eliminate any capital gains tax if you donate before December 31st you can receive a deduction for the fair market price of those assets and get rid of any capital gains you may have paid,” Welsh said.
