Tips for 2022 Tax Savings

February 06, 2023 |

It’s that time of year again! As you begin to collect your 2022 tax information, Simon Lever has three important reminders for actions you can take in 2023 to reduce your 2022 tax liability.

Contribute to a Traditional IRA

Individuals can make their 2022 IRA contributions of up to $6,000 ($7,000 if over 50 years old) to a traditional IRA until April 18, 2023. The deductibility of traditional IRA contributions depends on your modified adjusted gross income (MAGI). Contact your Simon Lever advisor to determine if you can receive the maximum deduction from a traditional IRA contribution.

Remember, Roth IRA contributions are always non-deductible on your individual tax return, but you still have until April 18, 2023, to contribute up to the maximum of $6,000 ($7,000 if over 50 years old), subject to MAGI limitations.

Contribute to Your Health Savings Account (HSA)

An HSA is a savings account designed to set aside pre-tax money to pay for qualified medical expenses for you, your spouse, and your dependents. If the funds are used for qualified medical expenses, there is no tax due on distributions. Individuals with family coverage under a high-deductible health plan (HDHP) can contribute a maximum of $7,300 ($9,300 if both spouses are over 55 years old, they are not enrolled in Medicare, and each spouse makes the additional $1,000 contribution to their own HSA). Individuals with single coverage under a HDHP can contribute a maximum of $3,650 ($4,650 if over 55 years old and not enrolled in Medicare). Contributions can be made for 2022 until April 18, 2023.

Contribute to a SEP IRA or Solo 401(k)

Self-employed individuals with no employees have the opportunity to contribute to a SEP IRA or solo 401(k), which may provide a much higher potential deduction than a traditional IRA, depending on your self-employment income. You have until April 18, 2023, (or until October 16, 2023, when filing an extension) to contribute to your SEP IRA or solo 401(k) for the 2022 tax year.

If you have questions about the above contributions, please contact your Simon Lever advisor.

Disclaimer: Information provided by Simon Lever as part of this blog post is intended for reference only. This information is not a substitute for seeking professional advice from a Simon Lever advisor. Although Simon Lever has made every effort to ensure that the information provided is accurate, the reader assumes all responsibility for the use of this information.