Making The Most Of It

Let me ask you a blunt question:  Were you happy with the refund you got last year? 

In many cases, that answer is a resounding “NO!” and even though we try to maximize returns for all of our clients, sometimes, that’s difficult, especially for those who earn their income on salary or via hourly work. 

On the other hand, it’s not too late to make a few changes to your withholding or your retirement contributions this year and make an impact on your tax bill.  More importantly, if you act now, you’ll be able to distribute those changes over that many more pay periods, so any impact to your take home pay will be smaller and easier to absorb. 

I know, I know, you want some examples, so let’s talk about them…

  • I’ve said it until I’m blue in the face, and I’ll say it again:  TAKE THE FREE MONEY!  If your employer has a company-based 401(k), you need to maximize your contribution to it.  If they’ll match you up to 6%, then you need to recognize that’s literally free money – that you can’t really spend until you’re 59 ½ – you’re being given.  Remember, too, your 401(k) can be “borrowed” from for things like the purchase of your first home, so it’s also a tool to drive more savings. 
  • A Roth IRA is a post-tax tool open to you as well, and while it’s not going to “save” you money in the short term, it’s sure to do so long-term.  Since it’s taxed now, it can’t be taxed when you retire – and there are Roth structures available that can be designed to take distributions from now, even while you’re working. 
  • College/Higher education funds also have some tax benefits and while they might not represent a significant “income” boost, which is really what we’re looking for here, like the Roth, they do offer some golden parachutes for savers and spending that is deemed appropriate.  Don’t have a kid to send to school?  That’s actually not an issue in some of these, surprisingly. 
  • Healthcare and Health Savings Accounts also have some “sneaky” ways they can help not only save money and meet your health needs, but also, finance some lifestyle choices.  One example I’ve read of – and this passed muster with administrators – allowed a woman to build a pool in her backyard because her doctor was on record as saying she had to swim as part of her medical recovery.  Her HSA provided the funding for the pool, so she was able to “borrow” the money from herself – interest free!

All this might sound implausible, and much of it is really esoteric for the average American, but by educating yourself on how the Tax Code is written and partnering with a great tax professional, you can open a whole new way to save; and while it might not bump up your refund next year, it WILL allow you to build savings and wealth. 

Let’s talk about where you’re at right now … and where you want to be!

To your success,


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