Consider these tax resolution ideas

Every January brings a familiar ritual. We promise to eat better, exercise more, and finally organize the garage. These are fine goals, but if you want a resolution that delivers real, measurable value, fewer taxes paid over your lifetime is about as concrete as it gets. Here are three possible resolutions to consider:

Resolution #1: Maximize use of your retirement accounts

One of the simplest ways to lower your current tax bill is by maximizing contributions to 401(k)s, IRAs and similar accounts. You can also defer taxes by maximizing contributions into 401(k)s and Traditional IRAs or reduce your taxes in the future by considering Roth accounts. Some other great tips:

• Ensure you are taking advantage of catch-up contributions.
• Always contribute to take advantage of any employer matching programs.
• Take full advantage of SEP IRAs as a small business owner.
• Look to create additional accounts when possible through spousal retirement accounts or youth accounts when children have earned income.

This resolution can be rich with tax saving ideas.

Resolution #2: I will keep my tax records organized.

If tax season feels like a scavenger hunt through old emails and crumpled receipts, organization should be high on your list. Remember, if you can’t support a deduction, you can’t take it. This is especially true if you run a small business, if you want to take advantage of things like the new $1,000 ($2,000 joint) charitable contribution deduction, or claim the teacher out-of-pocket expense deduction. The same is true with educational expenses.

Resolution #3: Commit to paying health costs tax efficiently

A health savings account (HSA) is one of the most powerful tax saving tools in the tax code. Contributions are often deductible, with earnings on funds in the account usually tax-free. Plus qualified medical withdrawals are also tax-free. So try to maximize your eligible donation into your HSA each year, including catch-up contributions. Then invest your unused funds to grow tax-free. Leaving the HSA untouched allows it to function like a stealth retirement account. Years down the road, those funds can be used for healthcare costs that almost everyone faces, often with significant tax advantages.

Making taxes a year-round conversation

Taxes are not a once-a-year event. Life changes like income shifts, business activity, investments, or family milestones can all affect your strategy.

This year, choose a resolution that quietly compounds, rewards consistency, and pays you back every April.