Take some time before January 1 to check off these tasks while they still count.

6 tax to-dos before 2022 ends 

Federal tax returns and payments are due on April 18, 2023 (state deadlines vary, but many match the federal deadline). While W-2 income statements wont be sent out until late January, you can use an online calculator now to estimate what you might owe. All you need are your pay stubs for the year, showing how much you earned and how much you paid in income taxes. 

If youre hoping to shrink your tax bill, or possibly boost your refund, here are some strategies to tryplus one time-saving tool thatll make preparing your return easier.

1. Create an online IRS account

Tax season tends to go more smoothly when youre organized. Take 15 minutes to set up an online account on the IRS website so you dont have to go digging through desk drawers or calling your former employer for a replacement copy of your W-2 at the last minute. 

While you cant actually file taxes from your account, you can access digital transcripts of your past four years of tax returns and income documents, pay a balance, make an estimated quarterly payment, set up a payment plan, and get a deadline extension. 

To make an account, you need to have a passport, drivers license, or state ID on hand. The IRS uses the ID.me platform for identity verification, so the process will also require either taking a selfie with facial recognition software or recording a short video chat with an agent.

2. Contribute to employer-sponsored retirement accounts

If you have access to a 401(k), 457, or 403(b) retirement plan through your employer, your contributions are sliced off the top of your paycheck, before income taxes are taken out (you pay taxes later on your withdrawals). 

For example, say your gross annual salary is $90,000 and you contribute 10% of your pay, or $9,000, to your 401(k) through paycheck deferrals throughout the yearthat brings your taxable income to $81,000. Thanks to pre-tax retirement contributions, your top tax rate is 22% instead of 24%.

Every retirement plan has an annual contribution limit. If you havent hit the limit yet and can afford to put more of your final paycheck this year into the plan, its a good option, says Marla Chambers, an accountant and senior financial planner at Buckingham Advisors.

Most employers allow you to adjust your deferral amount in short order if you reach out directly to HR, Chambers adds.

If you cant swing it by December 31, consider contributing to a traditional IRA. Deposits can count toward 2022 all the way up to the tax deadline in April, and can be claimed as a tax deduction (theyre effectively the same as a pre-tax salary deferral) if you meet the requirements for income and filing status.

3. Evaluate the standard deduction vs. itemized deductions

The vast majority of taxpayers claim the standard deduction to reduce their income by a pre-set amount: $12,950 for single filers and $25,900 for married, joint filers in 2022. 

Some taxpayers, however, may be able to unlock an even bigger deduction by adding up certain allowable expenses, called itemized deductions. These include state and local taxes, property taxes, mortgage interest, out-of-pocket medical expenses, losses related to theft or federally-declared disasters, and donations to tax-exempt charities. 

If you paid any of those expenses during the year and think the total may add up to more than the standard deduction for your filing status, its time to do the math to determine whether the switch is worth it. If you come close to eclipsing the standard deduction, consider bunching future expenses into this year, Chambers says. 

For example, if your mortgage payment is due on January 5, pay it in December instead so you can count the interest portion as a 2022 expense. Similarly, if you like to give money to your favorite charitable cause regularly, consider moving a few of next years planned donations to this year. Its a great planning tool and its pretty easy to do, Chambers says.

4. Sell losing investments to offset gains

The IRS taxes capital gains, which are profits you earn when you sell a stock, exchange-traded fund (ETF), or mutual fund.

But not all investments increase in valueand you can use that to your advantage. If you have an investment thats lost value since you purchased it, you can sell it by December 30, the last trading day of the year, and claim a loss. That loss will be applied to your capital gain for the year, effectively reducing the amount thats subject to taxes. 

For example, if you made a $6,000 profit from selling Stock A this year, but realized a $4,000 loss from selling Stock B, then your total taxable gain will be $2,000.

If your total capital gain drops to zero and you still have losses left over, you can offset your income for the year by up to $3,000. This year particularly has been a good year to look at stocks that are at a low and take a loss, Chambers says.

This strategy, called tax-loss harvesting, is a popular and effective tax-saving tool for investors who use brokerage accounts (it doesnt work with retirement accounts, due to the tax-deferral features). Some robo-advisors even do it automatically. But in order to maintain a balanced portfolio, experts recommend repurchasing similar investments after you sell.

Now, the IRS does have a little caveat to this rule that you cannot buy that same security within 30 days of selling it because it would violate whats called a wash sale, says Jonathan Johnson, an accountant and senior financial advisor at Blue Chip Partners.

For example, you cant sell your shares in Coke to claim a loss and then repurchase them immediately, he explains. But you could buy shares in Pepsi, since its a different company (or just wait 30 days), and maintain your exposure to that sector, Johnson says.

5. Contribute to a 529 education savings plan

College is getting pricier by the year, and more and more families are looking for effective ways to shore up funds to cover tuition and other school-related expenses. 

One option is the 529 savings plan, which lets people invest money in stock and bond mutual funds, but avoid paying any federal capital gains taxes on the growth when they use the money for qualified education expenses. It also offers more immediate, and often generous, tax breaks at the state level.

According to a report by BlackRock, which manages a 529 plan in Ohio, three dozen states offer income tax credits or deductions to anyone who contributes money to a 529 account, including parents, grandparents, and other relatives (in a handful of states, only the account owner qualifies for the tax benefits).

Whats more, adds Chambers, if a state allows for a $5,000 deduction but you give $10,000, most states will allow you to carry over [the difference] to the following years until you use it up. Check your states plan optionssome even allow tax breaks for people who save in another states plan.

6. Check your tax withholding for next year

In preparation for the new year, make time to review and update Form W-4 if youre a salaried or hourly employee. This document tells your employer how much to take from your paycheck to cover taxes. 

Any time your personal or financial situation changes (i.e., you get married, have a baby, or take on a second job or gig work) its a good time to review your withholding.

If you end up owing money to Uncle Sam in April, you didnt withhold enough. If you end up with a refund, youve withheld too much. If you havent updated your W-4 in 2022, look back at your 2021 tax return to see how much was withheld and what your tax bill or refund looked like to make adjustments for the upcoming calendar year, Johnson says. 

Submit a new W-4 as soon as possible to have the right amount withheld from your paychecks in 2023employers may take up to 30 days to update payroll deductions.

The takeaway

The clock is running out to make some major tax moves for 2022. If you want to reduce your taxable income, strategies include bumping up your 401(k) contributions and weighing the possibility of itemizing your deductions. If youre an investor, think about cutting your losses on devalued investments using tax-loss harvesting.

Purchasing less than a whole share allows for entering into the market on a smaller budget and investing on your terms. And using these type of purchases can be a way to diversify a portfolio without spending a great deal of money.

What is a fractional share? 

Fractional shares are less than a whole share of a company. Buying a fraction of a share is a more affordable way to invest and can be helpful in diversifying your portfolio. Building a portfolio with fractional shares allows investors to invest in companies based on the amount of money they have availablerather than having to focus on buying a particular number of whole shares.

A fractional share is a recent development in the investment industry wherein youre able to buy a piece of a share in certain companies, thereby allowing investors with smaller dollar amounts to still invest in companies they otherwise couldnt if the share price is too high, says Scott Sturgeon, certified financial planner, founder, and senior wealth advisor at Oread Wealth Partners, a fee-only financial advisory and wealth management firm. Its kind of like going to buy a pizzaexcept that instead of buying the whole pie, you only buy a slice of the pie. 

For example, If a stock is trading at $100, but you only want to buy $25 worth, it is entirely possible to do so. And as a result, you now own 25% of one share of that stock, says Jon Klaff, general manager of Magnifi. Fractional shares can help you get started investing with almost any amount. 

How do you buy fractional shares?

Purchasing a fractional share is a straightforward process. The first step is to open an investment account, and when doing so, ensure that the platform allows for buying fractional shares. Many online brokerage platforms support fractional share purchases for stocks, as well as exchange-traded funds (ETFs) and even mutual funds.

After identifying an investment platform that suits your needs, the next step is to deposit funds into the account, which will be ultimately used to make the purchase. Its also important to spend some time researching shares and identifying those that align with your financial goals and risk tolerance.

Once you know what you want to invest in, buying a fractional share on an investing platform is as easy as toggling from units, or number of shares, to dollars, typing in how much you want to spend, and then checking out like any other online payment, says Klaff. 

Pros and cons of fractional shares 

Like any form of investing, there are pros and cons to consider when buying fractional shares. Here are a few factors to keep in mind if youre thinking of buying fractional shares.

Pro:  Lower barrier to getting started

One of the biggest benefits associated with fractional share investing is that purchasing stocks this way makes investing far more accessible. Fractional shares lower the barrier to entry for first-time investors, explains Sturgeon. If someone in their teens or early twenties can get excited about investing by having ownership in brands or companies they like, that can have a really positive impact long-term, keeping them focused on saving and investing more over time.  

Pro: Access expensive stocks

Along with lowering the bar for entry to investing in general, fractional shares allow for purchasing premium stocks that may otherwise not be available to some buyers. With some stocks trading at thousands of dollars per share, fractional shares can provide a way to own a portion of a premium asset.

Pro: More flexibility

The upside of investing in fractional shares is that it allows for investing on your terms. Fractional shares can help you to personalize your portfolio, says Klaff. They give you more flexibility in making investments, so you can choose exactly how much you want to buy and invest in a way that fits you.

Con: Transfers arent available

Fractional shares, unfortunately, are not transferable. That means if you decide to switch from one brokerage firm to another or one robo advisor to another, the fractional share investments you made cannot go with you. This can be a significant drawback that youll want to consider carefully.

In the instance, youre not able to transfer fractional shares between brokerage firms, youll probably have to sell it, says Sturgeon. Its also important to understand that when you switch brokers, you may incur a tax event because youre forced to sell the shares.

Con: Not available everywhere

Not all investing platforms or brokerages support fractional share purchases. You may have to search around to find a platform that offers this type of investing. In addition, not all stocks can be purchased on a fractional basis.

The takeaway 

When youre just getting started investing, fractional shares can offer a budget-friendly way to get into the market. Buying assets in this way allows for accessing a portion of costly stocks and allows for diversifying your portfolio without significant expense. But if youre considering fractional stocks, be sure you select an investment platform that allows for buying them. 

That an offshore project is actually under construction in the U.S. is remarkable, given the permitting and litigation challenges that tend to drag plans out. But the South Fork Wind projectbacked by Danish renewable energy giant Orsted and the utility Eversource Energy, and slated to begin operations in late 2023is also notable for being built almost entirely with union labor, following the terms of a first-of-its-kind National Offshore Wind Agreement signed in May 2022 by Orsted and North Americas Building Trades Unions (NABTU).

That project labor agreement, along with passage this year of the federal Inflation Reduction Act (IRA), has buoyed hopes that a long-sought just transition for workers impacted by the shift to clean energy may finally be taking shape. For years, labor unions and allied environmental organizations have been arguing that high-quality jobs can and should power the shift away from fossil fuelsand that communities that have been economically reliant on those fuels shouldnt be left behind. But the reality is that while wind- and solar-related jobs have grown in recent years, they often dont pay as well as, say, a coal-fired power plant job. That has implications for Americas already-shrinking middle class.

The IRA isnt perfect, but its a historic step toward a just transition, says Jason Walsh, executive director of the BlueGreen Alliance, a coalition of labor and environmental groups. The legislation plows an unprecedented $369 billion into climate-related investments and for the first time ties federal clean energy tax credits to union-level (a.k.a. prevailing) wage standards. This in effect sets a wage floor that ensures workers on qualifying renewable projects are paid well. Another crucial component of the IRA Walsh points to: its requirement that registered apprentices are employed on renewable energy projects above a certain size. That may sound arcane. But in essence, it may ensure that a national network of high-quality career-oriented training programsmany run by building trades unionsis built into the future of the countrys renewable energy sectors. 

Taken together, the IRAs wage and apprenticeship provisions mean that renewable-sector jobs of the future are more likely to offer a path into the middle class. We shouldnt have to choose between good jobs and a clean environmentthats always been a false choice, Walsh says. The IRA will create high-quality jobs; it will reduce pollution; it will create benefits for workers and communities. Thats a really big deal.

New template for clean energy projects 

In a few different ways, the South Fork Wind project is in tune with the Biden administrations energy transition vision. Orsteds approach may preview whats to come as policies and investments made by the IRA reshape the countrys renewable energy landscape. 

Orsteds agreement with NABTU covers contractors and subcontractors, and the full onshore and offshore scope of the projecteverything from transmission and substation work to offshore turbine construction work. The agreement sets forth training provisions and terms for NABTU members to build all Orsted offshore farms on the East Coast going forward. It also creates apprenticeship opportunities and sets workforce diversity targets, among other initiatives.

We shouldnt have to choose between good jobs and a clean environment.

Jason Walsh, executive director, BlueGreen Alliance

Orsted had practical reasons for negotiating all this with NABTU. It gives the company steady access to a pool of skilled labor, says Allison Ziogas, U.S. labor relations manager at Orsted, helping to ensure safety, quality, and on-time project completion. Although organized labor is generally more expensive than a nonunion workforce, she says, it ultimately makes projects more economical. But the company also had broader goals in mind with the agreement. 

We want to make sure that workers who are currently in the fossil-fuel-based economy have a place to transition to, she says. But we also want to make sure that our projects are creating opportunities for those who have been underrepresented in the energy sector.

All these goals dovetail with the climate transition and workforce approach of the Biden administration, which wants to see 30 gigawatts of offshore wind energy being generated by 2030. (South Fork, one of the countrys first commercial-scale farms, will produce 132 megawatts.) The administration wants to create union jobs in America in this clean energy economy, U.S. Energy Secretary Jennifer Granholm said last year while visiting an Orsted facility in New London, Conn. Labor agreements should support all dimensions of the energy transition now underway, she said, drawing cheers from union workers.

Accelerating change 

The reality, however, is that most commercial wind and solar farms across the country are not constructed or operated by union workers. About 10% of solar and wind generation workers are union members, according to the 2021 U.S. Energy & Employment Report. Thats above the national private-sector unionization rate, but well below the rates seen in natural gas, coal, and nuclear power plants across the country. Solar farm development companies in many states rely on temp staffing agencies to construct facilities; much of the work, such as putting solar panels onto racks, doesnt require highly skilled workers. And the companies, which compete to win contracts with utilities, see low labor costs as a path to profits.   

Orsteds commitment to creating high-quality union jobs is a notable development, but offshore wind farms wont create that many jobs in the big picture of the U.S. economy, says Lara Skinner of Cornell Universitys School of Industrial and Labor Relations. The majority of [wind-related] jobs are going to be in the manufacturing supply chain, she says, so the country needs to prioritize the development of domestic renewable supply chains. The IRA tries to spur domestic manufacturing by offering an additional tax credit for renewable projects using American-made equipment, she notes. 

The South Fork Wind project points to what a domestic supply chain for the emerging industry can look like: It will feature the first-ever U.S.-made offshore wind substation. But right now, theres a big disparity in total U.S. employment across energy sectors. Wind, solar, and hydropower power generation (including construction and manufacturing) employs about 500,000 people. Natural gas, oil, and coal? About 1.4 million people.

Large economic shifts in our society havent always fared well for working people.

Allison Ziogas, U.S. labor relations manager, Orsted

The wind sectors growth has been slowed down by significant permitting challenges, which the IRA only partly addresses. Most of Orsteds projects, for example, remain in the permitting phase. Even assuming the benefits of the IRA are maximized, it will take years before the country sees a massive buildout of projects inspired by the legislation, Skinner says. As more coal-fired power plants are retired this decade, that wait could leave workers contemplating what comes next in the lurch.   

But state governments can play a key role in accelerating the creation of clean-energy-related jobs with solid pay and benefits, Skinner argues. State-level labor standards are really important, she says, noting that a lot of federal dollars flow through cities and states, and most renewable energy projects are approved at the local level. 

New York, Maine, Illinois, and Connecticut have all passed laws that aim to raise the quality of clean-energy-related jobs. For example, Connecticut now requires that prevailing wages be paid to all construction and operation and maintenance workers for projects two megawatts or above. 

Some states, such as Illinois, are making targeted investments in job training and economic development to aid historically disadvantaged communities, as well as communities and workers specifically impacted by the transition away from fossil fuels.

Its not just about creating good, well-paying jobs, says Illinois State Rep. Ann Williams (D-Chicago), who chairs the state legislatures Energy and Environment Committee and helped draft the states landmark Climate and Equitable Jobs Act, which became law last year. Its about creating opportunities for wealth in communities that have traditionally been left behind.

Building bridges to the future

Jim Harrison has seen what happens when communities hard-hit by the energy transition cant reinvent themselves. A former coal plant worker, Harrison is now director of renewable energy at the Utility Workers Union of America (UWUA). Its membership, spread across 22 states and all energy sectors, has fallen during the past 10 years as coal-fired power plants have closed. 

Weve seen the effects of a transition, and it hasnt necessarily been a just transition, says Harrison, who sits on the state of Michigans Council on Climate Solutions. When a power plant closes, for example, it leaves big economic holes. 

The IRA tries to address this challenge by offering additional financial incentives to companies that site clean-energy projects in communities where a coal-fired power plant has closed since 2010. The legislation is remarkable, Harrison says, but it also has limitations. For example, the IRAs prevailing wage incentives dont extend to the operations roles, such as solar and wind technicians, that ultimately maintain clean energy infrastructure. The UWUA counts 40 wind technicians among its members, and they make about $15 per hour more than nonunion counterparts, on averagearound $45 per hour.

Derek Mellema, a renewable specialist technician and UWUA member in Michigan, says a family-sustaining wage is greatbut its the job security and high safety standards enabled by his union that he most appreciates. Mellema also works as an instructor in UWUAs renewable energy apprenticeship program, teaching peopleincluding workers transitioning from traditional energy sectorshow to maintain commercial-scale solar and wind facilities. The two-and-a-half-year program, he says, helps create a pipeline of highly trained workers who can earn while they learn. 

Orsted is currently developing an apprenticeship program for the wind technicians who will take care of its wind farms after construction wraps up. That program, along with its ongoing agreement with NABTU, will ensure that work gets done the right way the first time, Ziogas says. Both the business and workers stand to benefit. 

Large economic shifts in our society havent always fared well for working people, she says. But we think that offshore wind can help usher in a just transition. The economic benefits that our projects can deliver to communities where were operating are just as important as the green electrons were delivering.

This annual financial review might even include your car insurance policy. Does your current policy still suit your needs? Has the cost gone up beyond what youve budgeted for? Could you obtain a new policy that is less elsewhere?

Ensuring youre getting the best deal for your money is not the only reason to shop for new quotes. You may also need to do so if youve experienced various life events.  

When to shop for a new auto policy 

There are some key times when you should consider requesting new auto policy quotes. They include when you move to a new location, add a new driver to the policy, and when you purchase a new vehicle. But these are just a few of the occasions when it can be a good idea to explore your options.

The auto insurance market is highly competitive, and consumers have a large variety of choices, says Pat Callahan, president of personal lines for Progressive. Because prices vary among insurers and rates change frequently, it can be beneficial for consumers to shop at least once a year.

When you move

When relocating from one state to another, your insurance policy cannot simply transfer with you. Auto insurance laws vary from one state to another. Your policy and its premium are based on local laws and the specific coverage youre required to carry.  

But even moving from one city to anotheror from one ZIP code to another within the same citycan be a reason to policy shop, as local moves can trigger changes in your daily commute to work. Additional factors may also change and impact your policy costs, such as local crime and accident rates.

Even moving cities within the same state can have an effect on car insurance rates, as premiums vary by ZIP code. Typically, metropolitan areas have a high concentration of drivers and an increased likelihood of accidents, making average insurance premiums higher, says Renata Balasco, insurance expert and licensed agent at the insurance comparison platform, The Zebra. If you move from a major city to a smaller suburb or residential areaor vice versayou may see your rates change due to differing traffic statistics. 

When adding a new driver   

In most cases, adding a new driver to a policy can result in higher premiums. This is because theres now a higher probability of a claim, particularly when you add a younger drivermeaning another reason you may want to shop around and ensure youre getting the most competitive price possible.

Teen drivers are the most expensive age demographic to insure, as insurance companies see them as the least experienced on the road and the most likely to get into accidents, says Balasco. Shopping around for a new policy when adding someone to it can allow you to browse any available discount opportunities that the new driver may qualify for; some common examples include a good student discount, a driving course discount, or a student away from home discount.

When you get a new car 

Naturally, when purchasing a new vehicle, youll want to ensure you have the proper coverage. The first step is to notify your current insurance carrier, as youre required to do, in order to update your coverage. This process typically results in a new cost for the policy. 

The year, make, and model of the car you drive have a significant impact on your policy cost. Newer vehicles may have safety features that older cars lack, but parts can be more expensive to replace if damaged, says Balasco. 

If your current policy changes too much for the new vehicle, consider obtaining some additional quotes elsewhere in order to find the best rate for your circumstances. 

When your policy needs change

Beyond all of the specific examples already discussed, your policy needs may evolve for other reasons as well. Perhaps youre a remote worker now, and in previous years you had a significant daily commute. The amount you drive impacts how much your insurance costs. If you drive less now, you may be able to reduce the policys overall price.

Additionally, if your car is getting older and you no longer feel the need to carry as much coverage as you once did. And you may also consider shopping for a new policy quote.

Job changes, starting or finishing school, kids going to or coming home from college, will all likely change your vehicle usage and insurance needs, says Callahan. So, it pays to contact your current agent or company and to potentially shop for new coverage if you arent satisfied with what they can offer you.

When the policy no longer fits your budget  

Of course, you dont need to have undergone major life changes in order to prompt the search for new policy quotes. In some cases, you may simply want to do so because your premium has increased and you need to bring costs in line with your current budget needsparticularly at a time when inflation is pinching many household budgets.

Car insurance rates are rising annually, regardless of your driving profile, says Balasco. If your premium has increased beyond your comfort levelor if youve been with a particular carrier for several yearsit may be time to shop around. Another insurance company may be able to offer lower rates or different discount opportunities.

4 tips for insurance shopping

As you set out to obtain new quotes, remember that there are a variety of ways to cut costs on an auto insurance policy, but youll want to make sure youre still getting all of the coverage you need.

Its important to compare coverages against your current policy, and not only look at price, advises Carmella Cange, Liberty Mutuals insurance manager of personal lines product design and experience, global retail markets US. Companies may be offering different coverages or limits on their quote, which is often the cause for a price disparity. Customers should make sure they are comparing costs against similar policy terms.

Its also critical to read the fine print of a quote, as some companies may be offering prices based on a six-month policy versus a 12-month policy to make the price appear cheaper. 

Additional ways to shop around include:

• Use online quote comparison tools: Online comparison platforms make it easy to look at your coverage options and price quotes all in one place. It can simply the shopping process and save you time.
• Work with an independent insurance agency: When you work with an independent agency, they will do the comparison shopping for you.
• Bundle policies: If youre looking for still more ways to save money, it can also be a good idea to bundle your insurance policies. This means using one insurance carrier to provide your home, renters, car, pet, and life insuranceor whichever of those policies you require. Often bundling can earn you a multi-policy discount, while also making it easier to manage all of your policies in one place.

The takeaway

Shopping around at least once a year for new car insurance can save you money and also help you adjust the policy to fit your current lifestyle and budget needs. When you do seek new quotes, be sure youre comparing equal levels of coverage and policy terms for the price. You can also make the shopping process quicker and easier by using an insurance comparison platform or working with an independent insurance agency that can do the comparison shopping for you.