Maximize your contribution to your 401K and/or IRA: Retirement comes all too quickly, Believe me on this. Each year you should maximize your retirement contributions to your 401k and/or IRA. This is particularly true if you have an employer who matches part of your contribution. Surprisingly, 50% of people who have matching contributions don’t take full advantage of this, which is like walking away from free money.
Maximize your contributions to a Flexible Spending Account (FSA) and Health Savings Account (HSA), if these are available to you. If your employer set up a FSA, you should also max out your contribution. If not, and you have a high deductible health policy ($1,350 deductible or more single or $2,700 or more married). You can put away in a HSA $3,450 single or $6,900 family.
If you have a ‘large’ estate, consider instituting a gift giving policy to your children and grandchildren of up to $15,000 per person, per year. Thus, if you have two kids who are each married, you can give $15,000 to each of your kids and to each of their spouses without any gift tax problem.
If you have a business and gross receipts are under $25 million dollars, you can use the cash method of accounting. You might want to consider switching.
The expense limit for equipment and off the shelf software has been increased to $1,000,000 for this year. Thus, if you are considering buying equipment and furniture, this is the year to do it.
Originally written in October 2018.
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