The ColoHealth Health & Wealth Newsletter
January 2024
Vol. 14, Issue 2

6 Money-Saving Tax Tips for 2024

1. Maximize your deductions for tax year 2023

It’s not too late to make contributions to your retirement plans for tax year 2023.

You have until April 15th to top-off your contributions to your IRAs and Roth IRAs for 2023. 

The IRA contribution limits for 2023 are $6,500 for those under age 50 and $7,500 for those 50 and older.

2. Fund your HSA (Or, switch to an HSA-compatible High-Deductible Health Plan)

Dollar-for-dollar, health savings accounts (HSAs) are arguably the most powerful tax reduction and wealth accumulation tools in the tax code.

No other savings vehicle offers the same combination of tax advantages:

• Tax-deductible/pre-tax contributions
• Tax-deferred growth as long as the money stays in the HSA
• Tax-free withdrawals to pay qualified medical expenses
• At age 65, the money is available for any reason, penalty-free. You just pay income taxes on withdrawals for anything other than qualified medical expenses.

The catch:  You need to be enrolled in a qualified high-deductible health plan (HDHP) to make contributions. 

But HDHPs are a great thing for most people. That’s because the higher deductibles mean your premiums are a little bit lower. That means you will have some cash freed up to contribute right away. 

We also have a solution that can enable those who have a healthshare plan to also establish an HSA. 

Read more: How to Open a Health Savings Account-Compatible Plan in Colorado

 3. Start tracking business expenses now

January 1st is a great time to implement a system for tracking all your business expenses for the year.

If you are self-employed or own a small business, now’s the time to create a spreadsheet or expense log for your Schedule C for your individual income tax return for the next year, and start filling it out.

Have a system for keeping receipts. Or use a mobile phone app to photograph, categorize, and store them on the Cloud. You’ll need this in case you get audited.

That way, filing your annual or quarterly taxes is a snap!

 4. Track vehicle mileage

Did you drive your own car for work?

Or for medical purposes? Or for charitable purposes? You can deduct money from your taxable income for every mile you drive. 

For 2023, the standard deduction was 

• 65.5 cents per mile driven for business use, up 3 cents from the midyear increase setting the rate for the second half of 2022.
• 22 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces. 
• 14 cents per mile driven in service of charitable organizations.

The mileage rates for 2024 haven’t been announced yet. But you should start tracking mileage anyway. Put a clipboard or notebook and pen in your car, or use an automated cell phone mileage tracker.

 5. Claim the business use of home deduction.

If you run your business from home, you may be eligible for a home office deduction.

Understand the criteria outlined in IRS Publication 587, which provides details on claiming this deduction.

6. Own long term care insurance

Health insurance generally doesn’t cover long term care costs.

Neither does Medicare.

That’s where long-term care insurance comes in.

Qualified long-term care premiums are deductible. The amount you can deduct depends on your age. But unless you expect to be tremendously wealthy or indigent in retirement, you should consider owning a long-term care policy.

For more information, click on my calendar and make an appointment for a free case analysis and quote.

Note: Unlike health insurance, long term care insurance is medically underwritten. That means you could be turned down, or required to pay more if you have health issues. The best time to buy long term care is now, before an unexpected health problem comes up. 

What to Do Now

Each of these tips is designed to be specific and actionable.

Not all of them will make sense for every circumstance. But most of them are very doable – and can make a big difference for your financial security over time. Especially if you are a business owner or have self employment income.

Need more information? The best thing to do is to work closely with a qualified tax advisor, and to contact your Personal Benefits Manager who sent you this newsletter if you’d like to look into long-term care coverage.

They can help you design your plan, and make sure any solutions you purchase are suitable for your individual circumstances.

To Your Health and Wealth,

Wiley P. Long III
President- ColoHealth

The ColoHealth Health & Wealth Newsletter is published monthly and emailed to subscribers at no charge. Subscribe now to stay on top of the critical information you need to know about health insurance, healthshare plans and managing your finances to achieve financial security.

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