Did Your Income Rise in 2024? 3 Tax Moves You May Want to Make in 2025

As incomes rise, particularly in 2024 for many Americans, it's crucial to adjust financial strategies to manage tax liabilities effectively. Individuals should consider adjusting their tax withholding to prevent underpayment penalties, especially if they expect higher income to continue. Additionally, maxing out contributions to retirement accounts like IRAs and 401(k)s can provide tax shields, promoting savings. Utilizing tax-advantaged healthcare savings is also recommended. With approximately 4 million Americans retiring this year, taking these steps can enhance financial well-being in retirement and help mitigate potential tax burdens.

Adjusting your withholding could prevent underpayment penalties in response to income increases, ensuring better tax management and financial planning.

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