5 Money Moves to Make Before Year End

It’s hard to believe that the year is almost over and 2022 is just around the corner. This is your last opportunity to boost your savings, reduce your tax bill, and help your community. Before we get into the busy holiday season, here are five money moves you should prioritize now.

• Use your Flex Spending Account (FSA) dollars: Your company may allow you to carry over $550 to the next year. Do you have more than $550 in your account? The CARES Act, passed in 2020, allows you to use FSA funds to purchase over the counter medications without a prescription and menstrual care products. This website provides a comprehensive list of eligible expenses.

• Make charitable contributions: This is a great time to donate to your favorite charities and get a tax deduction for 2021. If you don’t itemize your deductions, don’t worry! This year, any individual who does not itemize deductions may deduct up to $300 in cash contributions made to a public charity (up to $600 for joint filers).

• Max out your employer-sponsored 401(k) plan and Health Savings Account (HSA): The 401(k) contribution limit for 2021 is $19,500. The HSA contribution limit for 2021 is $3,600 ($7,200 for family coverage). If you’re close to maxing out or have the extra cash to spare, check with your company about adjusting your payroll deductions before 12/31.

• Check with your CPA or tax advisor to estimate your 2021 tax liability: If you earned more money in 2021 than in previous years, are self-employed, or receive equity compensation, it’s important to estimate how much you will owe for 2021. This way, there are no surprises in April. If your CPA or tax advisor does not work with you on tax planning, it may be time to hire a new one.

• Check your credit report: If you haven’t checked your credit report recently, do it now. You can get a free copy from all three reporting bureaus at annualcreditreport.com. Make sure that all reported information is accurate so there are no surprises when you’re ready to take out a loan. Have questions about how to read your report or make changes to incorrect information? Check out this guide on credit reports.