Last Minute Money Moves in 2023 To Help With 2022 Finances

Feb 14, 2023

Tax filers are getting a few extra days this year since April 15th falls on a Saturday and Monday the 17th is a holiday in certain jurisdictions.  So, taxes are due Tuesday, April 18th. There is still time to take some last-minute, small financially beneficial tax strategies if any of the below situations apply to you!

Situation 1: Did you fund a Flexible Spending Account (FSA) in 2022?

An FSA is a great employer-provided option to put money aside for IN-YEAR health and dependent care expenses while reducing taxable income.  Since these are “use it or lose it” accounts, they can be difficult to forecast and fully use and employees collectively annually forfeit more than $3 Billion in funds that are returned to employers![1]  In recognition of this, many plans offer limited exceptions to the year-end requirement. If you have remaining funds in your FSA account, check with your employer to see if any of the below apply to your situation:

  • You may be able to carry over $570 from 2022 to your 2023 balance
  • You may be able to spend 2022 dollars through March 15, 2023
    • Items such as eyeglasses, contacts, and over-the counter medications qualify, to name a few, A quick internet search can provide lists of many other eligible items.
    • You may not “stockpile” items, however; quantities purchased may not be higher than would be reasonably used in a year.
  • You may be able to submit receipts for 2022 expenses as late as March 31, 2023, if you forgot to submit expenses incurred in 2022 for reimbursement.

Note:  Don’t confuse an FSA account with its distant cousin the Health Savings Account (HSA).  We love the HSA account for many, many reasons and discuss it separately below and will devote a brief to that topic later this year.

Situation 2: Do you qualify for a deductible Individual Retirement Plan (IRA) contribution?

Although not as large as deferral amounts for 401(k) and other employer-provided retirement plans, IRA contributions can still help to prepare for retirement and reduce your taxes.  Contribution limits for 2022 are $6,000 or $7,000 for anyone age 50 or above.

On the plus side, when comparing IRAs to employer-based retirement plans, IRAs allow for contributions to be made up to the tax deadline date.  This means you can review your draft tax return and reduce your tax obligation by making a deductible IRA contribution if you qualify:

  • You are not covered by an employer retirement plan
  • Your employer has a retirement plan, but you don’t personally contribute to it and you are not “covered” by it [2]
  • You are covered by an employer’s retirement plan, but your Modified Adjusted Gross Income (MAGI) is below (fully deductible) or within (partially deductible) the below ranges:
Tax Filing Status: MAGI
Single, head of household $68,000-$78,000
Married filing jointly $109,000-$129,000
Married filing separately $0-$10,000
  • You are a non-earning spouse of a covered worker, and you file jointly and your MAGI is below $214,000 (benefit partially phases out between $204,000 and $214,000).

Situation 3:  Do you have earned income from self-employment?

Whether you are fully self-employed or are a W-2 employee with supplemental self-employment income, you are eligible to establish a SEP (Simplified Employee Pension) which allows for significant tax-deferred savings. You can establish and contribute to a SEP up to the due date for your business’ tax return.  (Though establishing a SEP is relatively simple, give yourself a couple of days to do the paperwork).

As the “employer” you can contribute up to 25% of your net earnings to your SEP not to exceed $61,000.  If you are also a W-2 employee of a different business, you can contribute to both your employer plan and your SEP.  Contributions to one do not impact the other.[3]

Situation 4: Did you have a high-deductible health plan (HDHP) in 2022 and underfunded an HSA?

As mentioned earlier the Health Savings Account (HSA) is a great tax and savings tool if you qualify by being enrolled in a high-deductible health plan (HDHP).  As a bonus, you can have more than one HSA account (but contributions are totaled across all HSA accounts) and you can contribute as late as tax filing day meaning there is still time to max out that contribution for 2022.

If you are an individual with a solo HDHP, your 2022 contribution is limited to $3,650, or $4,650 if you are 50+.  If you are on a family HDHP (you plus at least one additional family member) you can contribute $7,300, or $8,300 if you are 50+.  Lastly, if both you and your other family member are 50+ you can each contribute the $1,000 catch up contribution for a total of $9,300.  Note that the second family member must open their own HSA account for their $1,000 contribution.

It’s very important to note that the contribution limits INCLUDE any amount that your employer may contribute on your behalf, so be sure to account for that contribution.

While you may be able to take advantage of these last-minute strategies, by collaborating with a financial planner early in the year, you can develop a tax-efficient plan that considers all aspects of your financial situation. This proactive approach can help minimize your tax liability, increase your overall financial well-being, and reduce the stress and hassle of scrambling to prepare your taxes at year end. So don’t wait until the last minute, set up a call with us today. We’re here to help you make better financial decisions and build a path forward.


[1] https://money.com/fsa-contributions-workers-forfeit-money/

[2] This can be tricky as it is impacted by more than your own contributions; see if Box 13 is checked on your form W-2 and/or check with your employer

[3] https://www.chortek.com/sep-ira-and-401k-can-i-contribute-to-both/

— More —

SEP IRA vs. Solo 401(k): Retirement Savings for the Self-Employed

SEP IRA vs. Solo 401(k): Retirement Savings for the Self-Employed

Being self-employed is never easy. Thinking about your retirement and associated retirement accounts is often an afterthought. But contributing to a retirement account is still critical. Two popular (non-exhaustive) options that self-employed people can use to access...

To S-Corp or Not to S-Corp

To S-Corp or Not to S-Corp

When starting a business, owners often face the dilemma of which corporate structure to use. For smaller businesses, particularly those with only a single owner, the first three options that come to mind are operating as a sole proprietor, a limited liability company...

Climate On The World Stage

Climate On The World Stage

In January, world economic leaders gather in Davos, Switzerland for a 5-day meeting convened by the not-for-profit World Economic Forum (“the Forum”) to discuss global risks and opportunities as well as forge connections for cooperation on issues that impact the...

Year-end Tax Strategies

Year-end Tax Strategies

Before your brain goes full holiday-mode, as the year draws to a close, it’s time to consider some savvy end-of-year tax strategies. While it’s always better to plan throughout the year, here are two such strategies: tax loss harvesting and tax bracket stacking, which...

Growing Interest in Sustainable Investing

Growing Interest in Sustainable Investing

With the rise of the conscientious consumer and growing awareness about global warming, it’s no wonder that companies are pivoting toward higher sustainability. Aiming to increase sales by distinguishing their products to consumers, companies are finding...

Guide to Annual Benefit Enrollment

Guide to Annual Benefit Enrollment

It’s Annual Enrollment Time… this year, commit to looking at your benefit choices with a fresh set of eyes instead of just rolling over what you did last year.  These decisions can have long-reaching impact on your financial well-being!  We are happy to speak with you...

Federal Student Loan Payments Resume

Federal Student Loan Payments Resume

Federal Student Loan Payments Kick-In. For many federal student loan borrowers, the end of the pandemic-related payment pause is fast approaching. Beginning in October, many of these borrowers will be required to resume their monthly payments, which were deferred...

Evaluating Investments with an ESG/SRI Lens

Evaluating Investments with an ESG/SRI Lens

At Envest Asset Management, we have a menu of investments that we choose from to personalize investment strategies for clients. Though many clients will be invested in the same funds as others, overall allocations vary based on risk appetite, client ages and intended...

ESG Investing at Envest Asset Management

ESG Investing at Envest Asset Management

At Envest, a guiding principle of our firm is to provide clients with balanced, quality investment portfolios that also address environmental, social and governance (ESG) sustainability. We also help clients express individual values on a limited basis when that is...

Book an Introductory Meeting Today

Start your ESG/SRI journey. Schedule a no-obligation, 15-minute complimentary call to learn more about our approach and how it may fit with your goals.

Top