2023 Year-End Individual Tax Planning

Published by Heather on

2023 Year-End Individual Tax Planning

Before the end of the tax year, you may consider the following actions as a means of reducing your exposure to income taxes for the current year. Not all will apply to you, but many may. Please contact us to discuss the potential benefit and your eligibility before taking action.

1. As you get started, review your anticipated marginal tax bracket. Knowing which bracket you fall into can help you make informed decisions about deferring income or accelerating deductible expenses in order to maximize the use of lower tax brackets (or more preferred tax rates) and how much income can be incurred before higher rates kick in. WARNING: deferring income tax costs into a subsequent year does not always result in lower overall tax costs and may in fact increase your tax bill if the rates of taxation are higher in the subsequent year(s).

2. Maximize Retirement and other pre-tax contributions: If you have not already done so, consider maximizing contributions to tax-advantaged retirement accounts such as 401(k)s, IRAs, and HSAs. These contributions can reduce your taxable income and increase your retirement savings.

3. Roth IRA Conversions: Timing the conversion in a tax year in which your total anticipated taxable income will be lower may be beneficial if the tax cost is acceptable in exchange for the anticipated future tax-free appreciation.

4. Capital Gains and Losses: Review your investment portfolio and consider selling investments with unrealized losses to offset gains (loss harvesting). Capital losses can be used to reduce your overall taxable income but there are limitations.

  1.  Maximize use of lower ordinary or capital gains tax brackets. A 0% long term capital gains rate can be accomplished for those with lower gross incomes in the current year.
  2. Contribution of appreciated stock prior to sale. Donating appreciated stock entitles you to a charitable contribution at the fair market value of the stock, and also avoids the capital gains tax that would apply if you otherwise sold the stock.

5. Required Minimum Distributions (RMDs): If you are 72 or older, make sure to take your RMD from qualified retirement accounts by December 31st to avoid penalties.

  1. Qualified charitable contributions instead of Required Minimum Distributions (RMD). After age 70 ½, individuals can execute charitable gifts (up to $100,000 per year) directly from retirement accounts to fulfill any RMD requirements and exclude the earnings from your taxable income concurrently. Note that the maximum increases in the year 2024 to $105,000.

6. Bunching itemized deductions. The standard deduction in 2022 is $25,900 for joint filers ($12,950 single). You may consider applying a bunching strategy to gather deductions into a single tax year in which you plan to exceed these thresholds while taking the standard deduction in the preceding and subsequent years.

  1. Charitable giving: Adjusted gross income limitations are back for 2023.
  2. Medical expenses: Remain subject to a 7.5% of adjusted gross income limitation.
  3. State and local taxes: Deduction is capped at $10,000 annually.
  4. Interest expense: Mortgage interest and investment interest can be subject to limitations based on the source of the funds and amount of indebtedness.

7. Gifts (cash or property) before year end. Make any gifts sheltered by the annual gift tax exclusion before the end of the year and thereby save gift and estate taxes. You can give up to $17,000 in 2023 to each of an unlimited number of individuals under the exclusion. Transfers of income producing property also may reduce overall income taxes by shifting income to lower income tax family members.

  1. Keep in mind the current historically high lifetime exemptions from estate tax are scheduled to expire at the end of 2025. Consideration should be given to use of these exemptions to their fullest extent if your estate may be subject to an estate tax in the future.

8. Education Expenses: If you have education expenses, explore tax-advantaged accounts like 529 plans to save for education costs and potentially qualify for state tax deductions.

9. Evaluate Tax Credits: Review available income tax credits that apply to child and income limitations, energy incentives, and post-secondary education, to determine if you qualify and can maximize your savings.

Reminders –
Make all scheduled estimated tax payments and consider increasing withholdings from available sources to minimize exposure to underpayment penalties.
For those holding virtual currencies or other digital assets, review potential implications of exchanges for other digital assets, events that may result in taxable ordinary income, and what tax rates may apply.
Count the rental vs. personal use days when your vacation home was used personally and rented to third parties as it may impact your ability to deduct the operating expenses for the home. Remember that short-term rentals (such as Airbnb) may NOT be considered a rental (but rather a business) and may be subject to other reporting requirements.
• Arizona state tax credit contributions. Dollar-for-dollar state tax credits to eligible organizations can be paid up until April 15, 2024 to receive a 2023 tax credit. For contribution limits and an overview of several popular Arizona tax credit programs, please review our summary on our website. Several of the contribution limits increased in 2023.

Always remember to retain documentation to support income and deductions. Ensure that you maintain accurate records and receipts for reportable activity.

Finally, we encourage you to schedule a year-end consultation to discuss your specific tax situation. We can perform a comprehensive review and tailor a tax strategy that aligns with your goals. Remember that tax laws and regulations are subject to change, so it’s essential to stay informed about any new developments that may impact your tax planning.

We are committed to assisting you in making informed decisions to minimize your tax liability while maximizing your financial health. Please do not hesitate to contact us to schedule your year-end tax planning consultation.

 

Subsequent changes in tax law, code, regulations, regulatory guidance, or other precedent may affect the statements above and must be reviewed with your tax advisor before taking any action. Careful consideration and an accurate analysis of the income tax implications of any potential action is highly advised.

xosotin chelseathông tin chuyển nhượngcâu lạc bộ bóng đá arsenalbóng đá atalantabundesligacầu thủ haalandUEFAevertonxosofutebol ao vivofutemaxmulticanaisonbethttps://bsport.fithttps://onbet88.ooohttps://i9bet.bizhttps://hi88.ooohttps://okvip.athttps://f8bet.athttps://fb88.cashhttps://vn88.cashhttps://shbet.atbóng đá world cupbóng đá inter milantin juventusbenzemala ligaclb leicester cityMUman citymessi lionelsalahnapolineymarpsgronaldoserie atottenhamvalenciaAS ROMALeverkusenac milanmbappenapolinewcastleaston villaliverpoolfa cupreal madridpremier leagueAjaxbao bong da247EPLbarcelonabournemouthaff cupasean footballbên lề sân cỏbáo bóng đá mớibóng đá cúp thế giớitin bóng đá ViệtUEFAbáo bóng đá việt namHuyền thoại bóng đágiải ngoại hạng anhSeagametap chi bong da the gioitin bong da lutrận đấu hôm nayviệt nam bóng đátin nong bong daBóng đá nữthể thao 7m24h bóng đábóng đá hôm naythe thao ngoai hang anhtin nhanh bóng đáphòng thay đồ bóng đábóng đá phủikèo nhà cái onbetbóng đá lu 2thông tin phòng thay đồthe thao vuaapp đánh lô đềdudoanxosoxổ số giải đặc biệthôm nay xổ sốkèo đẹp hôm nayketquaxosokq xskqxsmnsoi cầu ba miềnsoi cau thong kesxkt hôm naythế giới xổ sốxổ số 24hxo.soxoso3mienxo so ba mienxoso dac bietxosodientoanxổ số dự đoánvé số chiều xổxoso ket quaxosokienthietxoso kq hôm nayxoso ktxổ số megaxổ số mới nhất hôm nayxoso truc tiepxoso ViệtSX3MIENxs dự đoánxs mien bac hom nayxs miên namxsmientrungxsmn thu 7con số may mắn hôm nayKQXS 3 miền Bắc Trung Nam Nhanhdự đoán xổ số 3 miềndò vé sốdu doan xo so hom nayket qua xo xoket qua xo so.vntrúng thưởng xo sokq xoso trực tiếpket qua xskqxs 247số miền nams0x0 mienbacxosobamien hôm naysố đẹp hôm naysố đẹp trực tuyếnnuôi số đẹpxo so hom quaxoso ketquaxstruc tiep hom nayxổ số kiến thiết trực tiếpxổ số kq hôm nayso xo kq trực tuyenkết quả xổ số miền bắc trực tiếpxo so miền namxổ số miền nam trực tiếptrực tiếp xổ số hôm nayket wa xsKQ XOSOxoso onlinexo so truc tiep hom nayxsttso mien bac trong ngàyKQXS3Msố so mien bacdu doan xo so onlinedu doan cau loxổ số kenokqxs vnKQXOSOKQXS hôm naytrực tiếp kết quả xổ số ba miềncap lo dep nhat hom naysoi cầu chuẩn hôm nayso ket qua xo soXem kết quả xổ số nhanh nhấtSX3MIENXSMB chủ nhậtKQXSMNkết quả mở giải trực tuyếnGiờ vàng chốt số OnlineĐánh Đề Con Gìdò số miền namdò vé số hôm nayso mo so debach thủ lô đẹp nhất hôm naycầu đề hôm naykết quả xổ số kiến thiết toàn quốccau dep 88xsmb rong bach kimket qua xs 2023dự đoán xổ số hàng ngàyBạch thủ đề miền BắcSoi Cầu MB thần tàisoi cau vip 247soi cầu tốtsoi cầu miễn phísoi cau mb vipxsmb hom nayxs vietlottxsmn hôm naycầu lô đẹpthống kê lô kép xổ số miền Bắcquay thử xsmnxổ số thần tàiQuay thử XSMTxổ số chiều nayxo so mien nam hom nayweb đánh lô đề trực tuyến uy tínKQXS hôm nayxsmb ngày hôm nayXSMT chủ nhậtxổ số Power 6/55KQXS A trúng roycao thủ chốt sốbảng xổ số đặc biệtsoi cầu 247 vipsoi cầu wap 666Soi cầu miễn phí 888 VIPSoi Cau Chuan MBđộc thủ desố miền bắcthần tài cho sốKết quả xổ số thần tàiXem trực tiếp xổ sốXIN SỐ THẦN TÀI THỔ ĐỊACầu lô số đẹplô đẹp vip 24hsoi cầu miễn phí 888xổ số kiến thiết chiều nayXSMN thứ 7 hàng tuầnKết quả Xổ số Hồ Chí Minhnhà cái xổ số Việt NamXổ Số Đại PhátXổ số mới nhất Hôm Nayso xo mb hom nayxxmb88quay thu mbXo so Minh ChinhXS Minh Ngọc trực tiếp hôm nayXSMN 88XSTDxs than taixổ số UY TIN NHẤTxs vietlott 88SOI CẦU SIÊU CHUẨNSoiCauVietlô đẹp hôm nay vipket qua so xo hom naykqxsmb 30 ngàydự đoán xổ số 3 miềnSoi cầu 3 càng chuẩn xácbạch thủ lônuoi lo chuanbắt lô chuẩn theo ngàykq xo-solô 3 càngnuôi lô đề siêu vipcầu Lô Xiên XSMBđề về bao nhiêuSoi cầu x3xổ số kiến thiết ngày hôm nayquay thử xsmttruc tiep kết quả sxmntrực tiếp miền bắckết quả xổ số chấm vnbảng xs đặc biệt năm 2023soi cau xsmbxổ số hà nội hôm naysxmtxsmt hôm nayxs truc tiep mbketqua xo so onlinekqxs onlinexo số hôm nayXS3MTin xs hôm nayxsmn thu2XSMN hom nayxổ số miền bắc trực tiếp hôm naySO XOxsmbsxmn hôm nay188betlink188 xo sosoi cầu vip 88lô tô việtsoi lô việtXS247xs ba miềnchốt lô đẹp nhất hôm naychốt số xsmbCHƠI LÔ TÔsoi cau mn hom naychốt lô chuẩndu doan sxmtdự đoán xổ số onlinerồng bạch kim chốt 3 càng miễn phí hôm naythống kê lô gan miền bắcdàn đề lôCầu Kèo Đặc Biệtchốt cầu may mắnkết quả xổ số miền bắc hômSoi cầu vàng 777thẻ bài onlinedu doan mn 888soi cầu miền nam vipsoi cầu mt vipdàn de hôm nay7 cao thủ chốt sốsoi cau mien phi 7777 cao thủ chốt số nức tiếng3 càng miền bắcrồng bạch kim 777dàn de bất bạion newsddxsmn188betw88w88789bettf88sin88suvipsunwintf88five8812betsv88vn88Top 10 nhà cái uy tínsky88iwinlucky88nhacaisin88oxbetm88vn88w88789betiwinf8betrio66rio66lucky88oxbetvn88188bet789betMay-88five88one88sin88bk88xbetoxbetMU88188BETSV88RIO66ONBET88188betM88M88SV88Jun-68Jun-88one88iwinv9betw388OXBETw388w388onbetonbetonbetonbet88onbet88onbet88onbet88onbetonbetonbetonbetqh88mu88Nhà cái uy tínpog79vp777vp777vipbetvipbetuk88uk88typhu88typhu88tk88tk88sm66sm66me88me888live8live8livesm66me88win798livesm66me88win79pog79pog79vp777vp777uk88uk88tk88tk88luck8luck8kingbet86kingbet86k188k188hr99hr99123b8xbetvnvipbetsv66zbettaisunwin-vntyphu88vn138vwinvwinvi68ee881xbetrio66zbetvn138i9betvipfi88clubcf68onbet88ee88typhu88onbetonbetkhuyenmai12bet-moblie12betmoblietaimienphi247vi68clupcf68clupvipbeti9betqh88onb123onbefsoi cầunổ hũbắn cáđá gàđá gàgame bàicasinosoi cầuxóc đĩagame bàigiải mã giấc mơbầu cuaslot gamecasinonổ hủdàn đềBắn cácasinodàn đềnổ hũtài xỉuslot gamecasinobắn cáđá gàgame bàithể thaogame bàisoi cầukqsssoi cầucờ tướngbắn cágame bàixóc đĩaAG百家乐AG百家乐AG真人AG真人爱游戏华体会华体会im体育kok体育开云体育开云体育开云体育乐鱼体育乐鱼体育欧宝体育ob体育亚博体育亚博体育亚博体育亚博体育亚博体育亚博体育开云体育开云体育棋牌棋牌沙巴体育买球平台新葡京娱乐开云体育mu88qh88