Many Americans have increased their income streams this year to combat inflation and the high cost of living, but the higher the income, the larger the tax bill. Generally, most people want to keep as much of their income as possible, so how can they made that happen?

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One of the most common ways is to maximize your non-taxable income. Let’s examine how to do that.

Taxable Income vs. Non-Taxable Income: What’s the Difference?

Before we explore how to maximize non-taxable income, it’s a good idea to understand the difference between non-taxable income and taxable income.

Taxable income is the amount of income subject to tax after deductions and exemptions. If we look at this from the perspective of an individual, taxable income includes wages, salaries, bonuses, commissions and tips.

According to TurboTax, the IRS also classifies even more income as taxable. Some of this includes jury duty fees, severance pay, unemployment benefits, freelance income and capital gains to name a few. In the event you won the lottery or a sweepstakes contest, this is also considered taxable income.

Non-taxable income is considered nontaxable in the eyes of the IRS. You would not be expected to pay taxes on a health savings account (HSA), child support payments, workers compensation payments, disability benefits (if you paid the premiums for the policy), inherited assets, capital gain on the sale of your primary residence, earned income in eight states or life insurance payouts (if you are the beneficiary).

It is also possible that some Social Security benefits, depending on your income, may also be considered non-taxable.

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Maximizing Non-Taxable Income

Now that you know the difference between taxable income and non-taxable income, you’re probably wondering what some of the best ways are to maximize non-taxable income. Here’s a shortlist of money moves to start making.

Open an HSA

Those with high-deductible healthcare plans can lower their tax bill by opening an HSA. This account may be opened by you or your employer and used to plan for the unexpected, like future medical costs, and as a retirement account.

An HSA uses pre-tax dollars, so this account grows tax-free. If your employer contributes to your HSA, their contributions are usually tax-free too. Plus, if you leave your job you can take your HSA with you.

Open a Roth IRA

Another way to maximize your non-taxable income is to open a tax-advantaged retirement savings account, like a Roth IRA. There are several benefits to opening a Roth IRA including the ability to make tax-free withdrawals in retirement and enjoy tax-free earnings in your account.

You can also continue making contributions to a Roth IRA as long as you’re earning money and pass your wealth onto any heirs, tax-free.

Move to a State Without Individual Income Tax

Earlier, we mentioned there are eight states where you would not be expected to pay individual income taxes. These states are Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming.

Consider moving to one of these states, but keep in mind if you do plan to move you’ll still need to meet your tax obligations with the state you are moving from.

Sell Your Primary Residence

According to TurboTax, taxable income does not include capital gain on the sale of your primary residence. This is a house you’ve owned for at least two years and lived in as a primary residence for two of the previous five years prior to the sale.

Be aware, however, this gain is tax-exempt, except to the extent it exceeds $250,000 if you’re a single taxpayer or $500,000 if you’re married filing jointly. There are also certain restrictions the IRS will need you to be mindful of, such as whether your home has ever been used as a rental property or home office.

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This article originally appeared on GOBankingRates.com: How To Maximize Your Non-Taxable Income

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