How to Show Your Finances Some Love This Tax Season
From the State Bank Wealth Management Team
Tax season doesn’t exactly spark joy for most people, but what if we told you it could be the perfect time to give your finances a little TLC?
At State Bank, our Wealth Management team is all about helping you make smart, confident financial decisions that feel good now and pay off later. And tax season offers some great opportunities to do just that. Whether you're aiming to lower your tax bill, build long-term wealth, or simply make the most of what you have, here are a few thoughtful ways to show your finances some love this season.
1. Max Out Retirement Contributions
One of the simplest ways to lower your taxable income is by contributing to a traditional 401(k) or IRA. These accounts allow you to tuck away pre-tax dollars for your future—meaning you’re saving for retirement and reducing your tax liability at the same time. Win-win.
And if you're eligible, consider contributing to a spousal IRA—a great way to build retirement savings for a non-working or low-income spouse.
2. Give a Little, Gain a Lot with an HSA
If you’re enrolled in a high-deductible health plan, contributing to a Health Savings Account (HSA) is a smart move. HSAs are triple tax-advantaged: you get a deduction now, your savings grow tax-free, and qualified withdrawals aren’t taxed. It’s a powerful tool that supports your health and your wealth.
3. Consider a Roth IRA or Roth Conversion
Looking to build tax-free income for the future? A Roth IRA can be a great way to do that. You won’t get a tax deduction today, but your money grows tax-free, and you won’t owe taxes on qualified withdrawals in retirement.
Already have a traditional IRA? You might want to talk to your advisor about a Roth conversion—especially if you expect to be in a higher tax bracket down the road.
4. Offset Gains with Tax-Loss Harvesting
Have investments that didn’t perform so well this year? All is not lost. By selling off underperforming assets, you can offset capital gains elsewhere in your portfolio—a strategy called tax-loss harvesting. It helps soften the tax blow while keeping your long-term plan on track.
5. Be Strategic About Where You Place Assets
Not all investment accounts are created equal when it comes to taxes. A helpful tip: try to keep high-growth assets in tax-deferred or post-tax accounts, like IRAs or Roth accounts, so you’re not paying taxes on growth each year. It’s all about working smarter, not harder.
6. Gift with Purpose
Giving can be just as rewarding for your taxes as it is for your heart. Whether you’re gifting to family members or making charitable donations, these actions can potentially reduce your taxable estate or offer deductions. Talk with your advisor about the best ways to make your generosity count.
7. Plan Ahead with College Savings
If you’ve got kids or grandkids, now’s a great time to think about college savings. Accounts like 529 Plans offer tax advantages while helping you prepare for future education costs. It’s a smart way to invest in your loved ones’ futures—and save on taxes along the way.
8. Think Long-Term and Invest Smart
When it comes to investing, it pays to be patient. Long-term capital gains (on investments held over a year) are taxed at lower rates than short-term gains. And choosing tax-efficient investments—like certain ETFs or index funds—can help keep more money in your pocket over time.
Let’s Talk About What’s Next
Whether you're filing on your own or working with a tax professional, this season is a great reminder to take a fresh look at your financial plan. If you’d like help reviewing your options or putting a smart strategy in place, our Wealth Management team is here for you.
After all, showing your finances some love now can set you up for a future you’ll feel great about.
Ready to make your money work smarter? Let’s connect.
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