The tip of 2023 is formally upon us. And whereas tax season would be the furthest factor from most shoppers’ minds, for individuals who have delay executing tax financial savings methods, now’s the final minute to behave to reduce tax legal responsibility for the 2023 tax yr. 

Shoppers who’ve waited to implement tax methods nonetheless have time to cut back their 2023 tax legal responsibility — or increase their refund earlier than subsequent yr. Maxing out pretax contributions, giving to charity and investing in clear power initiatives can all serve to spice up refunds or cut back taxable earnings. Whereas the tax financial savings choices could appear easy, taking motion at the moment can have a huge impact on shoppers’ tax legal responsibility when April rolls round. 

Maximize Tax-Most popular Financial savings Contributions

Taxpayers nonetheless have time so as to add to their 401(okay)s or well being financial savings accounts. 

In 2023, most taxpayers can contribute as much as $22,500 in pretax {dollars} to an employer-sponsored retirement plan, with taxpayers who’re age 50 or older in a position to make an extra $7,500 catch-up contribution. Taxpayers should make these worker contributions to retirement accounts by Dec. 31, though self-employed people with solo 401(okay)s have till their tax submitting deadline to contribute as an employer.

Not solely will maximizing pretax contributions cut back shoppers’ taxable earnings for 2023, however it might probably additionally assist them reap the benefits of any employer-matching contributions to assist develop their retirement financial savings.

Taxpayers can contribute as much as $3,850 in pretax {dollars} to well being financial savings accounts in 2023 ($7,750 for shoppers with household plans). HSA {dollars} don’t expire on the finish of the yr like another kinds of well being financial savings choices. HSA {dollars} each cut back present tax legal responsibility and provides shoppers a tax-free supply for paying certified well being bills. Shoppers who’re age 55 or older could make an extra $1,000 catch-up contribution.

Taxpayers also can contribute as much as $6,500 in pretax {dollars} to conventional particular person retirement accounts ($7,500 for taxpayers age 50 and older). Nevertheless, shoppers ought to do not forget that they’ve till their tax submitting deadline in 2024 to make IRA contributions for 2023.