Year-End Tax Planning Checklist

Year-End Tax Planning Checklist

December 12, 2023

Year-End Tax Planning Checklist

The end of the year is upon us. Below are a few of the more important year-end things you can do to put yourself in a better financial position.  

Tax Loss Harvesting

  • Review Investment Portfolio: Identify any investments that have lost value in taxable accounts.
  • Consider Selling Strategies: Discuss selling these investments with your advisor to realize losses, which can offset any capital gains.

Required Minimum Distributions (RMDs)

  • Age Consideration: If you are 73 or older, ensure you take the required minimum distributions from your retirement accounts to avoid penalties.
  • RMD Amounts: Confirm with your advisor the correct amounts to withdraw.

Roth Conversion Opportunities

  • Evaluate Tax Implications: Discuss with your advisor if converting a traditional IRA or 401k to a Roth IRA benefits your future tax situation.
  • Long-Term Benefits: Consider the tax-free growth potential of Roth IRAs.

Income Tax Opportunities

  • Charitable Contributions: Maximize tax deductions through charitable donations. Consider strategies like bunching donations or using a donor-advised fund.
  • Itemize vs. Standard Deduction: Assess which method offers more significant tax savings.

Maximize Retirement Fund Contributions

  • 401(k) and IRAs: Ensure you contribute the maximum allowable amount.
  • Catch-Up Contributions: If eligible (age 50 or older), take advantage of additional contribution limits.

SEP IRA and Health Savings Accounts (HSAs)

  • SEP IRA: For self-employed individuals, consider maximizing contributions.
  • HSA Contributions: Maximize contributions for potential triple tax benefits (tax-deductible contributions, tax-free growth, tax-free withdrawals for qualified medical expenses).

Roth 401(k) Contributions

  • Future Income Considerations: If you anticipate higher income in the future, consider contributing to a Roth 401(k) for tax-free withdrawals in retirement.

Other Considerations

  • Flexible Spending Accounts (FSAs): Use up remaining balances in your FSA.
  • Tax Credits and Deductions: Review eligibility for education credits, energy credits, or other deductions.
  • Estate Planning: Review and update your estate plan, if necessary.
  • Tax Bracket Management: Work with your advisor to manage income and deductions to potentially lower your tax bracket.

Consult with Your Financial Advisor

  • Personalized Advice: Each financial situation is unique. Regularly consult your financial advisor to tailor these strategies to your needs.

Remember, tax laws and financial situations are complex and can change. It's important to work closely with a financial advisor and/or tax professional to ensure that these strategies are appropriate for your individual circumstances.

The content is developed from sources believed to be providing accurate information. The information in this material is for educational purposes only and is not intended as tax, investment, or legal advice. It may not be used to avoid any federal tax penalties. Please consult legal, investment, or tax professionals for specific information regarding your situation. Mayfair Financial and FMG Suite developed and produced this material to provide information on a topic of interest. FMG is not affiliated with the named state-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.