Take action now to improve your finances this year. By Kimberly Lankford, Contributing Editor January 7, 2014 What can I do now to get my finances on track for 2014? Now that it’s a new year, you have plenty of fresh opportunities to make the most of tax-advantaged savings, and you still have time to benefit from a few 2013 tax breaks, too. Plus, it’s a perfect time to reassess your investing and insurance strategies and do some financial housekeeping. Here are ten steps you can take now to improve your finances this year.See Also: 8 Most Valuable Personal-Finance Lessons of 2013 Max out your employer’s retirement savings plan. You can contribute up to $17,500 to a 401(k), 403(b), 457 or Thrift Savings Plan in 2014, plus $5,500 if you turn 50 anytime during the year. See if you can afford to boost the percentage of your income you contribute each month, especially if you haven’t been making the most of any match offered by your employer. Advertisement Keep in mind that the money you contribute pre-tax lowers your take-home pay less than you’d expect—if you’re in the 25% tax bracket, for example, contributing $1,000 to a 401(k) will lower your take-home pay by just $750. And look for extra opportunities to save. Some public universities and other employers offer both 403(b)s and 457s and let you contribute up to $17,500 to both plans. And if you have a public sector 457 and are nearing retirement, you may have extra catch-up options — see Rules for 457 Retirement Plans for details. Make the most of your IRAs. You still have until April 15, 2014, to contribute up to $5,500 to an IRA for 2013 (plus an extra $1,000 if you were 50 or older anytime during 2013). And don’t forget about frequently overlooked opportunities to save—such as in a spousal IRA if one of you is working and the other is not, or an IRA for a teenagers with earned income. See Making Roth IRA Contributions in Retirement for more about spousal IRAs, and Setting Up a Roth IRA for a Teenager for some firms that make it easy to set up Roths for minors. You can also contribute up to $5,500 for 2014 anytime now, plus an extra $1,000 if you’re 50 or older anytime this year. Consider setting up automatic transfers from your paycheck or bank account to the IRA — $458.33 per month adds up to $5,500 by year-end. See Retirement Account Contribution Limits for 2014 for more information about who qualifies to make Roth contributions this year. Get triple tax breaks from a health savings account. More people will have high-deductible health insurance policies this year, either on their own or through their employers, but they may not know whether they’re eligible to benefit from a health savings account. If your policy has a deductible of at least $1,250 for individual coverage or $2,500 for family coverage, plus meets a few other requirements, then you can make tax-deductible contributions (or pre-tax contributions if they’re through your employer) to an HSA in 2014. You can stash up to $3,300 in an HSA if you have individual coverage or up to $6,550 for family coverage, plus an extra $1,000 if you’re 55 or older sometime this year. You can then use the money tax-free for medical expenses in any year. See Contributing to a Health Savings Account in 2014 for more information about who is eligible and where to open an account. And if you had an HSA-eligible policy in 2013, you still have until April 15, 2014, to make your contribution for last year. Make the most of the new FSA rules. The IRS and Treasury Department recently changed the rules for flexible-spending accounts. Now employers have the option to let employees carry over up to $500 remaining in the account from one year to the next. They aren’t required to make the change, but if they do offer the carryover, they can no longer provide a grace period until March 15 to use the money in the account. See Big Change to Flexible Spending Accounts for more information. If your employer still offers a grace period until March 15, now is the sweet spot when you can get maximum coverage from your FSA for large, uninsured medical expenses (such as dental work or laser eye surgery). You can use any money left over from last year, as well as the full amount you plan to contribute for 2014, even though you haven’t actually had the money deducted from your paychecks yet. Advertisement Organize and purge your tax files. Start gathering your 2013 tax records, so you’ll be ready when tax-filing season begins. Dig up receipts for child-care expenses and summer camp if you qualify for the dependent care credit, and records of investments you sold and contributions you made to charity. Review our list of The Most-Overlooked Tax Deductions to see if you qualify for other tax breaks. Meanwhile, you can start to toss some of your financial records you don’t need for tax purposes—such as your monthly brokerage and credit-card statements if they match up with your year-end report. You can also get rid of many supporting documents from your tax files three years after the tax-filing deadline has passed, which is the length of time the IRS generally has to audit your return (unless you’ve left out a chunk of your income). See Financial Files You Can Toss for more information. Get more money in each paycheck. If you usually get a big tax refund, you can change your withholding and take home more money every payday instead. See our Easy-to-Use Tax Withholding Calculator to estimate how many additional allowances you can take, which will reduce your tax withholding. Then file a new W-4 form with your employer, and you’ll see more money in your next paycheck. See How to Prevent a Big Tax Bill for details. Benefit from self-employed tax breaks. If you were self-employed in 2013, or even if you had some freelance income, you still have until April 15, 2014, to contribute tax-deductible money to a simplified employee pension. If you’re self-employed this year, you can start making 2014 contributions any time now, too. See Best Ways for the Self-Employed to Save for Retirement for details. It’s also a good time to start organizing your receipts for business expenses to get ready to do your tax return. See Tax Tips for Freelancers and the Self-Employed for details. And if you pay quarterly estimated taxes, keep in mind that your next payment is due on January 15 (the last quarterly payment for 2013). Make sure you have health insurance. You’ll have to pay a penalty if you don’t have health insurance in 2014. If you’re still uninsured, you have until March 31, 2014, to buy a policy on the a state health insurance exchanges without being subject to the penalty. The penalty starts at $95 per person or 1% of your household income, whichever is higher, which you’ll have to pay when you file your 2014 taxes next year. If you already have health insurance, your coverage is likely to meet the requirements. See The Lowdown on the Health Insurance Penalty for details. It can also help to check out prices for coverage on your state’s exchange if you currently have expensive COBRA or individual coverage and may might want to switch policies before open-enrollment ends on March 31—especially if you qualify for a subsidy to help with the premiums. See Get Ready for Obamacare for details. Advertisement Assess the rest of your insurance. It’s a good time of year to review all kinds of insurance, especially if you’ve had any life changes, such as marriage, divorce, a new baby or a new teenage driver, or if you moved or changed jobs. You may need to adjust your insurance to cover your needs, but you may also get a discount if your risk has dropped—your auto insurance premiums may shrink, for example, if you let your insurer know that you no longer use your car to commute. See The Biggest Car Insurance Discounts for other ways to save. Or you may be able to reduce your life, disability or long-term-care insurance rates if you stopped smoking, lost weight, or are a lot healthier than when you originally bought the policy. See Cut Your Risk, Cut Your Insurance Rates for more information. And with record cold weather arriving, it’s a good time to protect your home from winter storms (and avoid claims that could boost your rates later) plus make sure you have enough insurance. See Last-Minute Moves to Protect Your Home from Winter Storms. Do financial housekeeping. Start the New Year by reviewing the rest of your finances to reassess your financial priorities and make sure you’re still on track to reach your goals. Build up your emergency fund to keep at least six months’ worth of essential expenses in a savings account. Rebalance your portfolio so your investments match your time horizon and risk tolerance, especially if some have performed much better than others over the past year. Start using a budgeting program if you haven’t already. See 5 Financial Resolutions You Should Make for more ideas about paying off debt, saving more, and developing a long-term plan. Got a question? Ask Kim at email@example.com.