As we approach the end of 2023 (or the end of any year, for that matter), it’s important to look at your situation and make sure you’ve made the most of all of your tax opportunities in the current year.

This is a list of the things you might consider or should look at as you wrap up your year (and might think ahead about as we head into 2024).

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Max out your pre-tax retirement contributions.

Max out your 2023 401(k) or 403(b). The deferral limit for 2023 is $22,500 (+$7,500 catch up if age 50+). Limits to increase in 2024 to $23,000 and $30,500, respectively. Double-check to make sure you’ve received your employer match, if you have one.

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Max out your Health Savings Account contributions.

Make the maximum amount of pre-tax contributions to your 2023 HSA (Health Savings Account). The limits so contributions for 2023 are $3,850 for individuals, $7,750 for families, +$1,000 per person if age 55+. Unused funds here roll over to the next year.

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Max out your IRA contribution.

Contribute the maximum to your IRA. $6,500 is the 2023 maximum (+$1,000 if age 50+). Have next year’s (2024) contribution schedule ready for January to take advantage of the new $7,000 maximum limit.

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Accelerate or defer deductions, depending on income.

If your income is expected to be unusually high or low, adjust your deductions accordingly. This includes managing charitable contributions and medical expenses if you plan to itemize deductions. This year’s deduction limits are:

• Single filer standard deduction: $13,850
• Marries filing jointly standard deduction: $27,700
• Head of Household standard deduction: $20,800

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Consider a Donor Advised Fund.

If you are itemizing deductions in a relatively high-income year, consider a Donor Advised Fund (DAF) to lower your tax burden in 2023. Donor Advised Funds allow you to set aside money designated for charitable gifts. You receive a tax deduction in the year of DAF contribution, and the money grows tax-free until you decide to give it to a charity (or charities) of your choice.

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Take advantage of personal gifts.

As the holidays approach, you can give up to $17,000 ($34,000 per couple) without having to file a gift tax return. There is no limit on the number of recipients, so you can gift $17,000 to multiple recipients and it doesn’t aggregate to trigger the gift tax.

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Max out your 529 contributions.

These are actually rolled under the gift tax, so the maximum you can gift to each child is $17,000 per year. If aggressively funding a 529, you can make higher contributions (up to $170,000) without being subject to gift tax (gift tax return still required). This is called “superfunding”, and can help accelerate five years’ worth of contributions to the current year. If you plan to superfund, read more about the rules and how it is applied to your gift tax returns.

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Explore Tax-Loss harvesting.

You can sell securities with unrealized losses to offset other realized gains, or in some cases, taxable income. Net losses of up to $3,000 can be deducted from ordinary income; excess losses can be carried forward indefinitely.

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Consider Roth Conversions.

This may be applicable if your tax-deferred accounts are down and you are in an unusually low-income year. Our advisors can help you decide if this would be a good move,

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Property Taxes and Mortgage InterestIf you own a home, ensure that property taxes and mortgage interest are paid by the end of the year to maximize your deductions.

Year-end tax planning is a crucial step in wealth management. Our advisors stay on top of tax law changes and can help our Members with specific questions. With careful planning, you can navigate the year-end tax landscape with confidence and make sure you’re set up to optimize your year-end tax situation.

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Dates to know:

December 31, 2023

Last day for:

• Employee 401k Contributions
• Charitable Contributions
• Required Minimum Distributions

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April 18, 2024

Tax filing day; Deadline to make 2023 IRA contributions.

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Related content:

Range Tax Optimization

Secure 2.0 Act: Changes for 2024 and Beyond

‍Five Reasons You Should Graduate From DIY to a CPA or Tax Professional

Bonus Depreciation: What is it and can I take advantage?

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