8. Cover healthcare costs efficiently
Both health savings accounts (HSAs) and health flexible spending accounts (health FSAs) could allow you to sock away tax deductible or pretax contributions to pay for certain medical expenses your insurance doesn’t cover.
But there are key differences to these accounts. Most notably, you must purchase a high-deductible health insurance plan and you cannot have disqualifying additional medical coverage, such as a general purpose health FSA, in order to take advantage of an HSA. Also, unless the FSA is a “limited purpose” FSA, you cannot contribute to both accounts.
One important benefit of HSAs is that you don't have to spend all of the money in your account each year, unlike a health FSA. Generally, the funds you contribute to a health FSA must be spent during the same plan year. However, some employers allow you to roll over as much as $610 for 2023 in health FSA funds from year to year, and others allow a grace period of up to 2½ months following the end of the year to use your unspent funds on qualified benefit expenses incurred during the grace period.
Also, you can deposit funds into an HSA up to the tax filing due date in the following year (up to the maximum dollar limit) and still receive a tax deduction. For example, you can make your 2023 contribution by April 15, 2024. Meanwhile, health FSA contributions are generally only elected during open enrollment or when you become an employee of a company.
Be sure to check your employer's rules for health FSA accounts. If you have a balance, now may be a good time to estimate and plan your health care spending for the remainder of this year. In addition, see if the account balance can be used to reimburse you for qualified medical costs you paid out-of-pocket earlier in the year. For more on HSA contribution and plan limits, see our contribution limits guide.)
9. Move towards clean energy
The federal Inflation Reduction Act, signed into law in August 2022, includes nearly $400 billion for clean energy tax credits and other provisions aimed at combating climate change. “Tax increases included in the bill focus mainly on large corporations rather than individual taxpayers,” Navani notes. For individuals, the main consideration may be thousands of dollars in potential tax credits for buying new or used electric or hybrid clean vehicles, installing residential energy property, and other steps. Restrictions apply, so check with your tax advisor on which credits might be available to you, Navani suggests.