Tax Tips for Finance
Following are some generally recognized financial planning tools that may help you reduce your tax bill.
Charitable Giving - Instead of selling your appreciated long-term securities, donate the stock and avoid paying tax on the unrealized gain while still getting a charitable tax deduction for the full fair market value.
Health Savings Accounts (HSAs) - If you have a high deductible medical plan you can open an HSA and make tax deductible contributions to your account to pay for medical expenses. Unlike flexible spending arrangements (FSAs), the contributions can carry over for medical expenses in future years.
Roth IRAs - Contributions to a Roth IRA are not tax deductible but qualified distributions, including earnings, are tax-free.
Municipal Bonds - Interest earned on these types of investments is tax-exempt.
Retirement Plans - Participate in your employer sponsored retirement plan, especially if there is a matching component. Contributions are generally pre-tax and the tax-deferred compounding can add up to a large retirement savings.