Now that tax season is over, have you received your bill from the IRS and Colorado Department of Revenue? I’m sure you’re searching for tax savings strategies to implement moving into the second half of 2026. Here are 4 strategies that every taxpayer should know.
1. Max out your employer retirement contributions.
If you are employed and are offered access to a retirement plan that is a traditional 401k, 403b, or other salary deferral option you are allowed to contribute is $24,500 if you are under 50 years of age, $32,500 if you are between 50 and 59, or $35,750 if you are over 60 due to increased catch up limits. This is an easy strategy because it reduces your taxable wages while requiring little thought or effort from you as your contribution is automatically withheld from your paycheck.
2. Save for health insurance costs with an HSA.
Health Savings Accounts whether offered by your employer or utilized separately are a great vehicle to write off qualified medical expenses. If offered through your employer the contribution can be taken pre-tax as an additional way to reduce your taxable wages. This will prevent you from taking a deduction of the contribution on your tax return however, if you don’t have employer coverage you can open your own account and make contributions on your own. The maximum contribution amount for a self only plan is $4,400 under age 55 or $5,400 over age 55 and if you have a family that amount increases to $8,750 or $9,750. This one does have some restrictions: you must be covered by an eligible health plan with an annual deductible of $1,700 for self or $3,400 for family or direct pay subscription plan. Annual out of pocket maximums apply of $8,500 for self or $17,000 for family.
3. Child Care Credit and Dependent Care Savings Account.
The Child Care credit is a $3,000 or $6,000 credit that varies with income for reimbursement of expenses paid for child care while you are working or in school. The Dependent Care Savings Account is an employer benefit that deducts up to $5,000 from your salary to cover child care costs for employees and this amount can be withdrawn pre-tax to reduce your taxable wages. This care can cover those summer day camps, a nanny, or after care. But you have to make sure that you meet a couple of requirements. Be sure to obtain the EIN, name, and address of the care provider and keep receipts to audit proof of your deduction.
4. Colorado Enterprise Zone Credit.
Are you making a charitable donation to a non-profit that has achieved Colorado Enterprise zone status? You can receive a Colorado tax credit of 50% of your contribution. Be sure that you obtain your certificate from the facility so that you can claim your credit. Be sure to schedule a tax planning meeting with your tax advisor to discuss strategic implementation.
