Here’s a two-for-one deal in 2018: Increase your contributions to your 401(k). This way, you save for retirement on a tax-deferred basis while reducing your taxable income.
In 2018, you can save up to $18,500 in your 401(k) plan, plus $6,000 more if you’re 50 and over.
For IRAs, savers can sock away $5,500 in 2018, plus a catch-up contribution of $1,000 if they’re 50 and up.
To sweeten the deal, the IRS grants a savers’ credit to individuals who put money away in retirement accounts. The credit phases out fully for single filers whose adjusted gross income exceeds $31,500 (the limit on AGI is $63,000 for married joint filers).
Finally, don’t neglect your health savings account in 2018: You can deduct the contributions you make to this tax-advantaged account. An individual with self-only coverage under a high deductible plan can save up to $3,450 in 2018, while an individual with family coverage can kick in up to $6,900.
“These are normal things we do every year, maximizing your 401(k) plan contributions and taking advantage of your medical benefit plans,” said Perry of Marcum.