nbcnews.com
Year-End Tax Strategies to Reduce 2024 Tax Liability
Individuals can lower their 2024 tax bill or raise their refund by maximizing Health Savings Account (HSA) contributions up to $4,150 (self) or $8,300 (family) and donating appreciated assets to charities before the December 31 deadline.
- What are the most impactful year-end tax strategies for reducing 2024 tax liability?
- Year-end tax planning allows taxpayers to reduce their 2024 tax bill or increase their refund by utilizing strategies before the December 31 deadline. Key strategies include maximizing contributions to Health Savings Accounts (HSAs) and donating appreciated assets to charity.
- How do HSA contributions and charitable donations of appreciated assets provide tax benefits?
- Taxpayers can leverage HSAs for tax-free growth and charitable donations for a "double tax advantage," reducing both income tax and capital gains tax. These strategies are particularly relevant for those with high-deductible health plans and appreciated assets, such as cryptocurrency.
- What are the potential limitations of year-end tax planning strategies, and how can taxpayers mitigate these limitations?
- The effectiveness of tax-loss harvesting is limited this year due to a strong stock market. However, proactive HSA contributions and charitable donations of appreciated assets remain viable options for reducing 2024 tax liability. The timing of these actions is critical to maximize benefits.
Cognitive Concepts
Framing Bias
The framing is overwhelmingly positive towards tax reduction and maximizing investment returns. The headline and introduction emphasize strategies to "slash your tax bill" and "boost your refund," creating a bias towards aggressive tax avoidance as the primary goal. This framing could overshadow the importance of responsible tax planning and compliance.
Language Bias
Words and phrases like "slash your tax bill," "boost your refund," and "double tax advantage" are used. These are not inherently biased, but they create a highly positive framing of tax reduction, potentially influencing readers to prioritize tax avoidance over other financial considerations. Neutral alternatives could include 'optimize your tax situation,' 'maximize tax benefits' or 'reduce tax liability'.
Bias by Omission
The article focuses heavily on tax-saving strategies beneficial to high-income individuals with access to HSAs and investment portfolios, potentially overlooking strategies relevant to lower-income taxpayers or those without such resources. There is no mention of alternative strategies for those with limited investment options or those facing different financial situations. This omission could limit the article's overall usefulness and create a skewed perspective.
False Dichotomy
The article presents a dichotomy between receiving a tax refund (overpaying) and receiving a tax bill (underpaying), oversimplifying the tax system's complexities. It doesn't address situations where taxpayers might strategically aim for a smaller refund to optimize cash flow or other factors.
Sustainable Development Goals
The article discusses tax strategies that can help individuals reduce their tax burden. This can indirectly contribute to reduced inequality by providing more financial resources to individuals, particularly those with higher incomes who may benefit most from these strategies. However, the effect on overall inequality is complex and depends on the distribution of these benefits across different income groups.