High-income W2 employees pay more taxes than anyone else in the country.
Business owners, self-employed and lower-income households have LOTS of tax breaks to take advantage of.
But as a high-income W2 employee you get almost none.
So you want to take full advantage of the few you do have – pre-tax 401k and HSA contributions.
With 3 paychecks left for 2022, make sure you’re on track to:
– Max out your 401k ($20,500 per person)
– Max out your Health Savings Account ($3,650 individual / $7,300 family)
Obviously saving more is admirable.
But you’ll also save in taxes.
Maxing out your 401k means you could get an extra $2500 in your tax refund. (Or $5,000 for a two-income household.)
Maxing out your HSA means you could get an extra $1800 back per household (or half that for an individual).
Financial Zen Masters look for ways to apply maximum financial leverage.
So if you’re not on track to max these out, then increase your contribution amounts NOW for your last 3 paychecks.
Your retired future self will thank you (and so will the April 2023 version).
