As the year draws to a close, financial experts are quick to roll out familiar tax-saving advice.
They urge taxpayers to time income and expenses, either accelerating deductions into the current year and deferring income into the next, or doing the reverse, depending on circumstances. They recommend fully funding tax-deferred retirement accounts to help reduce taxable income.
Investors are also encouraged to harvest capital gains and losses, make charitable gifts or contributions to donor-advised funds, or consider qualified charitable distributions from an IRA.
Other common year-end tips include maximizing contributions to a health savings account for those enrolled in a high-deductible health plan and using flexible spending account dollars before the “use it or lose it” deadline.
But one critical tax consideration is often overlooked.
Health insurance costs, and their direct connection to taxable income, deserve a place on every year-end to-do list, said Jae Oh, author of “Maximize Your Medicare.”
