The holiday decorations aren’t up yet, and the Christmas carols haven’t hit the radio yet. That would really be rushing the season. But there’s one place where it pays to do your shopping early if you want to save money: Taxes! There are a few steps you can take now before the holiday rush to reduce your tax bill.
Increase Retirement Plan Contributions
Have the HR department take a little bit more out of your paycheck to increase your tax-deductible contribution to the 40l(k) or 403(b) plan. Unlike an IRA, you must make this year’s contributions before year-end. And the limits are generous: $17,500 if you’re under age 50, and $23,000 at age 50 or older. But even if you can’t contribute the max, every little bit will grow tax deferred.
If your company gives you a matching contribution, you get a double benefit — tax deduction and “free money.” You can’t afford to miss out on that deal. And though it sounds painful, you’ll get by without those extra few dollars in your paycheck.
Use Flex Spending — Save HSA Account
There are two different kinds of health care savings accounts. The Flex Spending account must be spent before year’s end. Don’t wait until the last minute to consider appropriate purchases. Schedule eye exams or dental procedures now, before the holiday crunch. This is use-it-or-lose-it money, so be sure to take advantage of any opportunities. For a list of approved spending items, go to IRS Publication 502 online.
But if you have a health savings account, it can roll over for future use. Although you do want to schedule regular preventive care, there’s no rush to use this money as it will grow tax-deferred to be used for some future medical expense.
Open Enrollment for Health Care Plans
Even if you already are enrolled in an individual health care plan for 2014, it may pay to check out the features of other plans, and their costs, for 2015. Yes, you’ll have to navigate Healthcare.gov again! But this year should be less confusing. Remember that open enrollment starts on Nov. 15, and ends on Dec. 31. Be sure to avoid this last-minute crunch.
Other Healthcare Deadlines
Seniors should check on new deals being offered on Medicare Part D. Even if you take the same drugs, or don’t take any drugs at all, you must have Part D coverage. Many plans have changed their pricing or their formularies. The best way to find out is to go to Medicare.gov and click on the plan finder tool.
And you might also want to check on the best Medicare supplement plan — or enroll in Medicare Advantage. You’ll be surprised at how much money you might be able to save by considering other supplement plans. You can compare Medigap supplements at the Medicare.gov website. Or if you’d like some handholding and advice, go to eHealthInsurance.com and they will help you find both a supplement and a Part D prescription drug program to fit your needs.
The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.
This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom