{"id":10,"date":"2024-03-25T12:00:00","date_gmt":"2024-03-25T12:00:00","guid":{"rendered":"https:\/\/moneywithkatie.com\/3-ways-to-lower-tax-bill-rollover-ira-forms\/"},"modified":"2025-09-04T20:30:39","modified_gmt":"2025-09-04T20:30:39","slug":"3-ways-to-lower-tax-bill-rollover-ira-forms","status":"publish","type":"post","link":"https:\/\/moneywithkatie.com\/3-ways-to-lower-tax-bill-rollover-ira-forms\/","title":{"rendered":"3 Ways to Lower Your Tax Bill in 2025 (and How to Navigate Those Weird Rollover IRA Forms)"},"content":{"rendered":"
\n

As my standard legalese: I am <\/em>not a licensed tax professional<\/em><\/strong>, and this is not tax advice. Please consult your friendly neighborhood CPA and do your due diligence. This is intended to be a starting point for your #TaxSzn research.<\/em><\/p>\n<\/div>\n

\n
\n

As I was reminded repeatedly by TurboTax\u2019s 2023 ad campaign called \u201cDon\u2019t Do Your Taxes,\u201d most people would rather scale an icy mountain<\/span><\/a> than file their taxes.<\/p>\n

While I absolutely used to feel that way, too, I\u2019ve come to love tax season as a time for reflecting on my financial progress, collecting forms like rare Pok\u00e9mon, and poking around my tax software of choice, TaxAct (not a sponsor, but you should be!), for deductions I didn\u2019t realize I qualified for. (The part where the software tells me I owe tens of thousands of dollars is my least favorite part, but it\u2019s decidedly fun up until that point!)<\/p>\n

So, we\u2019re discussing three ways to lower your tax bill that I\u2019ll highlight below, but I also wanted to cover a few bizarre forms you may encounter when you begin dabbling in the world of deductible contributions to qualified retirement plans. (This won\u2019t be exhaustive, but they\u2019re items Henah or I have personally come across after implementing our own strategies.) It can be scary the first time you hit a speed bump in the tax software that\u2019s like, \u201cYo, you may have screwed this up!\u201d <\/p>\n

Now, depending on how you earn and your access to retirement accounts and certain healthcare plans, <\/strong>it\u2019s possible that all three of the options we cover today will be viable for you, but they all have one thing in common: <\/p>\n

They\u2019re all legal ways to hold on to more of your income, instead of forking it over.<\/h2>\n

Crucially, these vehicles allow contributions made this<\/em> year\u2014in 2025\u2014to be characterized as though they were made last<\/em> year, in 2024. And at the risk of stating the painfully obvious: To take advantage of this, you have to have the cash available to invest. <\/p>\n

Which tax year should you select when making contributions in 2025 for 2024?<\/h2>\n

When you\u2019re contributing to these investment accounts, they\u2019re going to ask you which contribution year you\u2019re electing<\/em>. If you\u2019re trying to ease your 2024 tax burden, be sure to select 2024<\/strong>! If you choose 2025, it\u2019ll apply the contribution to next year\u2019s <\/em>tax bill. <\/p>\n<\/div>\n

\n
\n

The Traditional IRA and a few related fun formz<\/h2>\n

If you (and your spouse, if you have one) are not<\/em> covered by employer-sponsored retirement plans at work (read: a 401(k) or 403(b), most likely), you can each contribute up to $7,000 to your own Traditional IRAs<\/span><\/a> for the 2024 tax season. <\/p>\n

That\u2019s up to $14,000 you can wipe right off the top of your taxable income, if both partners contribute the full amount to their respective IRAs. <\/p>\n

A minor point of clarification for couples with combined finances: These are intended to be individual<\/em> retirement accounts, so there\u2019s no such thing as a \u201cjoint\u201d IRA.<\/p>\n

How do I calculate the tax savings I\u2019ll score from contributing to the Traditional IRA?<\/h2>\n

For example, if you and your spouse are in the 24% marginal tax bracket after other deductions and you both contribute the maximum allowed, that\u2019s a joint tax savings of approximately $3,360 (a calculation we arrive at by multiplying our contribution, $14,000, by our marginal tax rate, 24%). <\/p>\n

This means if you owed the IRS, say, $1,500, this one move would wipe out that tax liability, and probably generate a refund, too.<\/strong><\/p>\n

But here\u2019s how your income may thwart your plan to deduct your contributions<\/h3>\n

Straight from the mouths<\/span><\/a> of our boiz of the IRC, here are a few income limits and phaseout scenarios to be aware of for the 2024 tax season:<\/p>\n

If you ARE covered by a workplace retirement plan\u2026<\/strong><\/p>\n