What is the best way to improve your finances? How can You reduce taxable income in 2022?

As the year 2021 draws to a close, there are a few things you can do to ensure that you enter 2022 on the best possible financial foundation. Now is an excellent time to: optimize your stock investments, minimize your taxes, get the most out of your employee health funds, or even keep track of expiring credit card rewards.

Make Improvements to Your Stock Portfolio

With all that’s transpired this year, now is a good opportunity to double-check that your stock investments are in line with your objectives. Your portfolio will almost certainly need to be rebalanced. It’s been a tumultuous few months, and you can take advantage of it. 

You should also factor in the possibility of increasing interest rates in the future months. Here are some tips for managing your stocks at the end of the year.

Take These Steps to Reduce Your Taxes

Things you do now could have a big impact on how much tax you have to pay in April. There are things you should do this time of year to avoid giving Uncle Sam extra money, whether it’s prepaying bills for deductible costs or selling investments that have lost value.

Keep an eye on your retirement savings.

The IRS sets limits on how much you may contribute to special-tax-treatment retirement funds. This year’s 401(k) contribution limitations are $19,500, or $26,000 if you’re 50 or older by the end of the year. 

The restrictions on IRA contributions are $6,000 or $7,000, depending on your age. Accounts for self-employed people have constraints as well.

Also Read: The Crypto Loophole That Saves You a Lot of Money: Crypto Wash Sale Rule

Manage Your Employee Health Benefits

This time of year, both flexible spending accounts and health savings accounts are worth considering.

When it comes to FSAs, make sure you don’t lose any money that hasn’t been spent. As a result, now could be a good time to arrange medical appointments or buy purchases.

You don’t have to worry about losing money in an HSA if you don’t use it. However, you may want to make the most of the money you’ve set up for future medical bills, which could include expenses in retirement.

Keep in Mind Your Credit Card Rewards

Credit card rewards are subject to expiration and might be a changing target. Because of the epidemic, several cards’ expiration dates have been loosened.

It’s a good idea to verify your rewards towards the end of the year to make sure they haven’t expired before you can utilize them.

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