7 Money-Saving Tax Strategies for Individuals in 2024 

Individual tax strategies to improve your finances

As we begin 2024, it’s a great time to consider how you can meet your personal and financial goals over the course of the next year. Taking charge of your individual taxes ahead of time is a fantastic approach to make this happen. Here are 7 money-saving tax strategies that could help you reach your desired destination. 

1. Review your gift and estate plan

The current estate and gift tax exemption is set to sunset on January 1, 2026. Right now, that exemption sits at $13.61M per individual and is going to be cut in half to about $6-7M. The process for getting your estate plan and gifting done can take months. If your net worth is (or will be) over $10 million, now is the time to talk to your financial advisor, accountant, and/or legal advisors about what you need to do to maximize the amount of your estate you can gift to others.  

2. Add to a 529 college saving plan

By putting away money in a 529 college savings plan for your kids or grandkids, you can give the gift of education to a beneficiary of any age without incurring the federal gift tax. If you are a resident of Minnesota, you also can receive a tax credit of up to a $1,500 per individual per year or $3,000 per year in total.  

3. Contribute to your pre-tax retirement and HSA accounts

Consider increasing your contributions to your health savings account (HSA) or pre-tax retirement accounts (401(k), Traditional IRA). Doing so will lower your taxable income while you increase your savings. For last year’s taxes, you still have until April 15 to contribute to your HSA and IRA.  

4. Make charitable contributions

Donating to qualified charitable organizations not only supports meaningful causes but also provides tax benefits through deductions. Donating appreciated stock is a great tax benefit. You eliminate future capital gains from your portfolio and get the full deduction for the Fair Market Value of the stock donated. Ensure that you itemize your deductions to take full advantage of these tax savings. 

5. Consider residency planning

For individuals with multiple homes, strategically planning where you reside for most of the year can have tax implications. Becoming a resident of a state with low or no income tax can lead to substantial tax savings. But, this process requires careful consideration and planning due to its complexity. 

6. Purchase qualified clean energy vehicles

If you are in the market for a new car in 2024, investing in an environmentally friendly vehicle could potentially make you eligible for tax credits. You can save money and promote sustainability!  

7. Consider energy efficiency home improvements

Planning on doing some home renovations? Energy-efficient improvements, such as solar panels or enhanced insulation, not only benefit the environment but may also qualify you for tax credits or deductions. 

Use these individual tax strategies in your 2024 financial planning to boost tax savings and gain better control over your finances. Don’t forget to seek advice from a tax professional to customize these strategies to fit your individual situation and stay compliant with regulations.  

Get in touch with us today to kickstart preparations for your 2024 taxes and connect with our wealth management partners to continue to build towards your financial goals.