Most consumers today have to haggle over car prices, shop the clearance rack, defer major purchases and clip grocery coupons. But most of don’t manage our tax liability, potentially one of our biggest annual expenses. By paying more attention to ways to save money on your tax liability you can take advantage of several money-saving opportunities. If your employer offers an annual period of open enrollment for benefits it can be key time for taxpayers to not only select the best employer-sponsored health and retirement plans, but also to minimize their tax liability.

Making informed decisions about your benefits can mean lower taxes and more cash in your wallet.

Health Insurance
Health insurance premiums paid pre-tax and money set aside in retirement, cafeteria and other plans, translates to reduced taxable compensation and more take-home pay.
Retirement Savings
Employer-sponsored savings plans are one of the easiest ways for taxpayers to save for retirement. 401(k)s, 403(b)s, thrift plans, and SEPs are examples of retirement savings tools for employees in the private sector, public sector, non-profit arena or for those who are self-employed. Contributions grow tax-free reducing your overall tax liability.

Health Care Plans
Determining the best health care plan depends on an employee's age, number of dependents, health and income level. If you choose a high-deductible, low-premium plan, Health Savings Accounts offer a tax-advantaged option of accumulating cash to use against the deductible. You do not have to use the money in the year it was contributed so remaining dollars roll over to the next year. HSAs can serve as a valuable source of cash in the event of a future medical emergency.

Cafeteria Plans
Using Flexible Spending Accounts or Cafeteria/Section 125 Plans for eligible health care and out-of-pocket costs may provide taxpayers with additional tax savings. Like the HSA, a set amount is deducted each pay period and taxable compensation is reduced by that amount. Distributions may be used only for qualified medical expenses. However, unlike an HSA, any money remaining in the account is forfeited at the end of the year.

Child Care Costs
A similar plan is available for child care costs. Taxpayers can designate a specific amount for the expense, up to $5,000 a year, that's deducted pre-tax from their pay. All related child care expenses are then reimbursed from the dependent care benefit account.

The Finance Guy is writing books that might be of interest to you: The Essential Guide to Securities Markets, provides an overview of financial markets and products. With the recent turmoil in the the credit and stock markets this will be a good book to help you understand what's happening. Next spring he will publish "Family Financial Freedom" a book to help consumers manage their money.