The opportunity to get some last-minute tax breaks is almost over. In most cases, you have until Dec. 31 to contribute to your retirement accounts for a 2023 tax deduction. You do not want to miss this opportunity to save money and avoid taxes.
Take Out Your Required Minimum Distribution
If you must take out a required minimum distribution (RMD), do not forget to do it before the year’s end. Make sure to take out the full amount so that you are not penalized 25 percent of the amount you should have withdrawn. Even though the penalty is not as much as it was recently (50 percent), 25 percent is still more than you want to lose.Max Out Your Matching Contributions
Whether you have a 401(k) or an individual retirement account (IRA), you want to contribute a minimum of what your employer will match. Since it is free money, claim all of it you can. If you do not have other savings accounts, you might consider contributing the maximum allowable amount to boost your retirement savings.A 401(k) enables you to contribute much more than a traditional IRA. If you are younger than 50, you can contribute a maximum of $22,500, but $30,000 if you are 50 or older.
