- The Finance Gourmet

HSA Contributions

September 27, 2025September 15, 2025 by Finance Gourmet

A quick reminder not to forget to use your HSA account to pay for ALL of your qualified medical expenses. Remember, you get the deduction based upon CONTRIBUTIONS, and your contributions do NOT have to be made before your expenses are incurred. In other words, if you go to the doctor and get a $180 bill, you can (EVEN AFTER) contribute $180 to your HSA account. Pay the $180 doctor bill (maybe using a rewards credit card), and THEN reimburse yourself the $180 expense. This is the best way to deduct medical expenses if you qualify. Otherwise, remember that you can only deduct medical expenses that are 10% above your adjusted gross income. With an HSA account, every contribution is deductible, regardless of when you use the money to pay medical bills. Also, any medical bills you pay with your HSA cannot be deducted as medical expenses. Also, HSA paid expenses do not count toward the 7.5% floor needed to deduct medical expenses. Remember, the contribution is deductible, not the expense. Contribute money for every qualified medical expense you have, and the net effect is the same as deducting all of your medical expenses. Remember, unlike a FSA, you can …

Procedure for Using HSA Account To Pay Medical Expenses

September 27, 2025August 23, 2025 by Finance Gourmet

I’ve written a bit lately about Health Savings Accounts, or HSAs, how HSAs work with state taxes, and the difference between Health Savings Accounts and Flexible Spending Accounts. But, the one question I keep getting is how exactly to use a HSA account. The Health Savings Account Theory The idea behind a Health Savings Account, or HSA, is a little bit like a 401k account, or even a 529 college savings plan account. You save money for future expenses like college or retirement, but in the case of an HSA, you are saving for medical expenses. Like with a 401k plan, or an IRA, you get a tax deduction benefit for making contributions. Also, like the other accounts, your money grows inside the account tax free. And, finally, like a Roth IRA, or a 529, you withdrawals for approved expenses are also tax free. So, theoretically, assuming the world around you proceeded in an orderly and predictable manner, and your budget contained plenty of room for all appropriate spending and savings, then you would contribute regularly to your HSA account, and invest that money, so it could grow over time, into a big reserve that is available to you when you …

IRS Standard Deduction 2024 and 2025

January 15, 2025October 23, 2024 by Finance Gourmet

What is the standard deduction amount for 2025, and what about 2023 and 2024? (That way I don’t have to go through and delete that data 🙂 The IRS updated the standard deduction number and it’s a little bit higher this year again. When filing income taxes, taxpayers can choose to either itemize tax deductions, or take the standard tax deduction amount. The IRS adjusts how much the standard deduction is each year based upon inflation. The 2025 standard tax deduction amount is a bit higher than the 2024 deduction amount for most taxpayers because of inflation. Capital One Rewards Catalog 2023 Remember, even though you will be filling your taxes in early 2025, those tax returns are for the year 2024, so use the 2024 standard deduction amount on taxes you work on in the first quarter of 2025. When you file your taxes in early 2025, those taxes are for your income and deductions in 2024. Alright, now that we’ve beaten that horse to death, let’s get to some numbers. 2024 Standard Tax Deduction Amount For use when filing your taxes in early 2025. As usual, there are different deduction values depending upon how you file your income …

Basic Taxes Overview 2024

June 12, 2024 by Finance Gourmet

As June 2024 comes to a close Americans everywhere have stopped thinking about taxes, but the real key to paying less in taxes like the rich do is year-round tax planning. So, let’s do a quick overview of tax law in 2024 and how that will affect filing 2024 taxes in 2025. Tax Basics Form 1040 Let’s begin by kicking out anyone who has unusual scenarios of income or assets. This is going to be a basic tax overview for taxpayers that get W-2 forms, or 1099 forms, or own their own small business. If your income comes from something else like royalties, or mining rights, or whatever, this will not apply to you. This is also true if a trust, or other tax situation drives your income or expenses. Frankly, people in this category probably already have accountants, attorneys, or financial managers. Let’s not clog this up with “But what if…” about situations that don’t apply to “average” scenarios. The basic tax form is Form 1040. For the most basic scenarios, that form is the only thing a taxpayer needed to file. For others, a variety of Schedules are required, the results of those schedules are then added in …

Child Tax Credit 2024

June 12, 2024January 27, 2024 by Finance Gourmet

When you file your 2024 taxes in 2025, you may get a tax credit for each child. The Child Tax Credit for 2024 is $2,000 for each qualifying child. However, the Child Tax Credit phases out for higher incomes. You can claim the Child Tax Credit in addition to the Standard Deduction, even if you do not itemize your deductions. You can take the full Child Tax Credit if you are married filing jointly with a modified adjusted gross income under $200,000. For others the threshold is $100,000. Once you make more money than that, the credit starts phasing out. Any biological children aged 16 or younger are eligible if you are married filing jointly. If you are divorced, then who gets to claim the child tax credit was likely part of your final divorce settlement. If your child is 17, be prepared to be screwed over. You get just $500 for your 17-year-olds no matter how childish they act, or the fact that most of them are still in high school. Beyond that, there are a lot of different rules that I’m not going to cover here, but the IRS has a useful tool to determine if your child …

Tricks to Save Money On Taxes

February 1, 2023January 19, 2023 by Finance Gourmet

If you have fairly simple taxes, that is ones that do not include several complicated schedules or worksheets that have to be filed, then you might not want to pay for TurboTax or TaxCut or other tax preparation software. But you still don’t really want to go it alone without some sort of double-check. Let’s jump right in with some tricks to save money on taxes. TurboTax For Free TurboTax offers a marketing gimmick where they allow you to do your taxes on the online version of TurboTax for free. You only have to pay when you print or e-file your return. But who says you have to print anything? When you have finished inputting all of your information, and TurboTax has finished crunching all of the numbers, switch to the form view where you actually are looking at an electronic version of the tax form. Copy the numbers down onto Form 1040 that you printed off of the IRS website, and voila. Your taxes are done, and all for free! Obviously, if you have to generate a bunch of extra paperwork or IRS Schedules, this isn’t the method for you. But keep in mind that many of the worksheets …

How To Choose 529 Investments

December 12, 2022November 17, 2022 by Finance Gourmet

If you don’t already have a 529 plan opened, you should start with the instructions for opening a 529 plan before worrying about which investments you use. Trust me, when I tell you, as a former financial planner, that the biggest drag on saving money for college isn’t choosing the wrong investments, it’s taking too long to get started. No amount of tax advantages will make that up. Most parents overestimate the amount of merit-based scholarships their child can get, and underestimate how much financial aid they may need in the form of loans. Whether you are using education savings accounts, a Coverdell IRA, or a 529 plan, you want to cover as many qualified higher education expenses as you can without loans. The amount you need will be more influenced by need than merit, which means if you have a higher income and higher assets, you are going to pay more. That is just the way the world works right now. The only thing you can really do is deduct all the qualified educational expenses you can from your taxes and pay the rest with tax-free money from 529 accounts and the like. At least then your qualified education …

House Child Tax Credit Bill

November 28, 2022August 12, 2022 by Finance Gourmet

Recently, the Democrats passed a bill called the American Rescue Plan Act, that made some changes and updates to the child tax credit. This was quickly spun as either a middle-class tax cut or raising taxes on the poor. It’s weird to see how people can distort what is really happening in order to fit their own agenda. The Child Tax Credit is $3,000 per child between 6 and 17 years old. The Child Tax Credit is $3,600 for each child under 6 years old. Child Tax Credit Basics The child tax credit is a credit. This is different than a tax deduction. A deduction is something that reduces your taxable income. The actual amount you save on your taxes then is a fraction of the amount deducted. For example, if you made $80,000 and you get $20,000 in deductions, then you pay taxes only on $60,000 in income, which means you get only a percentage of that $20,000 in deductions. A credit, on the other hand, is a reduction not in your income, but in your actual tax. So, a $1,000 tax credit means you actually pay $1,000 less in taxes. A credit is much better than a deduction …

IRA Contribution Limits 2022 and 2023

August 14, 2023July 19, 2022 by Finance Gourmet

ira contribution limits for 2021 and 2020

Not all tax numbers stay the same over time. Many income limits and other tax numbers are adjusted each year, either for inflation, or by another statutory mandate. These tax numbers include the tax tables and tax brackets for each year, for example. It also includes IRA contribution limits. The IRS announces the numbers each fall. Since the numbers are adjusted based on inflation, they only increase if there is enough inflation over the course of the year to increase the IRA contribution limits by the same percentage. With some crazy inflation this year, you would expect some of the IRS numbers to be up significantly. IRA contribution limits for 2023 are higher than they were in 2022. 2022 IRA Contribution Limits The 2022 IRA contribution limits were published by the IRS in late 2021. Note that these limits are for contributions made during the 2022 tax year, for use when filing income taxes due by April 2023. IRA Max Contribution 2022 The maximum IRA contribution for 2022 is $6,000. This is the same as the maximum deduction for 2021, 2020, and 2019. The maximum IRA contribution in 2023 is $6,500, up $500 from the year before. Both the 2022 and …

How To File Colorado Income Tax

January 23, 2023February 16, 2022 by Finance Gourmet

Colorado Income Tax Is Easy These days, the major tax preparation software companies, like Turbo Tax and Tax Cut offer people with easier federal income taxes a way to file for free. They do this for two reasons. First, and foremost, despite the millions of dollars they spend lobbying to keep the IRS itself from providing a free, easy way to file basic income taxes, people are starting to expect such things in the internet age. By getting ahead of the IRS and offering free(ish) tax filing, they can keep a damper on any move to making tax filing without them easier. The other reason is that most people with very easy taxes probably won’t bother with their software anyway. Filing income taxes isn’t hard when you work a single job and just deduct a couple of kids and a mortgage. But there are ways to upsell, or otherwise encourage people to buy, or pay for other services like audit defense. The most common upsell is filing your state income taxes. Colorado State Income Tax Is it worth paying TurboTax to file state returns in Colorado? Probably, not. Colorado State Tax is not that complicated for most Colorado taxpayers. While …