I Asked A Cpa For Last-minute Tips To Lower My Tax Bill

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Jen Glantz

• I'm looking for last-minute ways to save on my taxes, so I talked to a CPA about my options.
• It's not too late to contribute to a SEP IRA or HSA, which will reduce my taxable income.
• I've always taken the standard deduction, but right now is a good time to check whether that's the best strategy.

I had good intentions of trying to reduce my 2024 tax bill before the year ended, but I failed. Halfway through December I realized I never met with my CPA to discuss last-minute actions I could take to lower my tax payment.

While I already missed out on potentially saving thousands of dollars, I decided to reach out to a CPA to see what I can do before I file my taxes.

I spoke with CPA Emily Luk, who had four tips to reduce my 2024 tax payment.

1. Make a big contribution to my SEP IRA

Luk first asked about my retirement plans. I mentioned that I have a SEP IRA that I try to fund monthly, but have missed a few contributions in 2024.

According to the SEP IRA guidelines, I'm able to contribute up to 25% of my total compensation, or a maximum of $69,000 for the 2024 tax year.

Since I haven't even contributed 10% of my salary, Luk advised that I put more money into my SEP IRA if I have the funds.

"For example, if you contribute $5,000 to your traditional or SEP IRA, you don't pay taxes on that amount," Luk said. "So let's say you made, you know, $55,000 of income, you would now only pay taxes on $50,000 of income."

If the money inside the IRA grows because you're investing it, then that money is also not taxed until you withdraw it for retirement.

After looking over my finances, I'm able to contribute at least 5% more of my income from 2024 into my SEP IRA, which will reduce my overall tax bill.

2. Contribute to my HSA

Similarly to my SEP IRA, Luk said that there's still an opportunity to contribute more to my Health Savings Account (HSA) before April.

"You don't pay taxes on money you contributed to your HSA so you get tax savings," Luk said. "Plus, that money then gets invested and can be used for medical expenses down the road."

According to HSA guidelines, I'm able to contribute up to $8,300 for my family's HSA for 2024. So far, I've only contributed less than a third of that.

3. Review my deductions

Before it's time to file my tax return, Luk recommend sitting down and double checking that all of my deductions are accounted for.

"There are two ways to approach deductions," Luk said. "You can do standardized deductions or itemized deductions. If you go through your deductions and realize it's more than the standard deduction limit of $14,600 for single filers and $29,200 for married couples filing jointly, then you might want to opt for itemized deductions instead."

If I go through all of my deductions for the year and see that they are more than the standard amount, Luk said that I'd be able to deduct that higher amount from my income and save more off my taxes as a result.

In the past, I've been too lazy to spend the time going through my deductions one-by-one and have opted for the standard deduction amount instead. This year, I'm going to spend the next month auditing my deductions to see if there's any room to save money here.

4. Look for tax loss harvesting opportunities

Luk explained that sometimes people forget to claim tax loss harvesting on their tax return, which could save them money.

"If you have an investment portfolio and you sold something that had gone down, you can automatically deduct up to $3,000 of losses against your income," she said.

In 2024, I did sell stocks that were down and didn't even think about adding that to my tax planning strategy.

However, Luk mentioned that anything sold from my investment portfolio in the early months of 2025 won't count for 2024's tax bill. The deadline for using those down investments for tax loss harvesting was December 31.

Don't know where to start? Consider a financial advisor. 

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