Select independently determines what we cover and recommend. We earn a commission from affiliate partners on many offers and links. This commission may impact how and where certain products appear on this site . Read more about Select onOne of the easiest and most beneficial ways to reduce your taxable income is to contribute to a pre-tax retirement account, such as an employer-sponsored
You can't take the deduction if you have a retirement plan at work and your income is at least $87,000 as a single filer/head of household, $143,000 as a married couple filing jointly or $10,000 as part of a married couple filing separately. If you're considering this strategy, make sure you have enough cash to contribute and that the investment fits your overall financial plan. Goals like paying offHSAs offer a triple tax advantage, since funds go in tax-free , can grow tax-free by investing the balance, and can be withdrawn tax-free if used for qualifying medical expenses like deductibles, copays or coinsurance. Plus, any remaining balance on your HSA will roll over from year to year.
If you earn above that, you can deduct a pro-rated amount. The cut-off for claiming a deduction is $90,000 for single filers and $180,000 for joint filers.