Max Out Your Health Savings Account

Retirement accounts aren’t the only kind of tax-advantaged savings vehicles. Health Savings Accounts (HSAs) allow you to use pre-tax dollars to pay for qualified health expenses, and in effect, lower your taxable income. In 2022, the IRS allows contributions up to $3,650 to an HSA and $7,300 for families. Those limits are up from $3,600 for individuals and $7,200 for families in 2021. The IRS also permits HSA owners ages 55 and over to save an extra $1,000 per year.

Not only will maxing out an HSA lower your taxable income, the contributions you make grow tax free and can be carried over from year to year with no withdrawal requirement. Furthermore, there are no income limits on HSA contributions, which means high earners can take full advantage of these savings vehicles. Plus, any distributions from the HSA account are tax-free!