Reduce Taxes
Use every legal means to reduce the money you give this regime via taxes. Here’s an entirely legal one: make contributions to IRA or HSA accounts before the tax deadline, and you can remove that income from your taxes for the prior year.
How to do it:
IRAs:
The more familiar way to shift money out of this year’s taxable income and into some future year’s taxable income are traditional IRA contributions. Like HSAs, you can contribute through April 15th, but you can’t access the money without a penalty until you’re nearly 60, except in limited circumstances. If you can afford to lock money up for retirement, or if you’re nearing retirement, this is another way to shift your taxable income from this year, to a future year. While the general idea is that your tax rate will be lower after retirement, this also conveniently shifts your tax payment from this government to some future government. We can work to make sure they’re spending it on better things.
HSAs:
Flexible spending accounts expire at year-end, but health savings accounts (HSA) accrue, and after age 65 can be used as retirement funds. Contributions reduce your annual income, and expenditures are untaxed for qualified medical purposes. After age 65 expenditures for non-medical use carry no penalty—just your current tax rate. If you have an HSA, contribute the 2025 limit before April 15th to shift that income from being taxed by this administration, to either untaxed or taxed by some future government, depending on your ultimate use of the funds. Eligibility ends when you enroll in Medicare, and not all insurance qualifies for HSA participation.
There are a few other options for self-employed people. This 2025 article outlines the options above, plus some less common options. Please note that annual contribution caps will differ, and check with your accountant or tax preparer for 2025 details.
