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Year-End Tax Planning

Year-End Tax Planning

December 12, 2022


A review of tax planning is important as we approach the end of another year. See below for a few items to think through and take action on before 2023 arrives. 

  • Capital Gains Planning - In March, we posted an article on Tax Loss Harvesting. We’ve continued to utilize this strategy throughout the year when it made sense. Any realized losses can offset capital gains from transactions (stock, business sale, etc.) this year or can be carried forward indefinitely to offset gains in the future. 
  • Capital Gains Distributions – Mutual funds are required to distribute some capital gains to shareholders, and this is typically done in the first few weeks of December. Where appropriate, we attempt to limit these distributions (and associated taxes) by selling the mutual fund for a period of time and replacing it with a similar position. 
  • Qualified Account Conversions – Will this year or next year be a low income year? It is possible that a conversion of your IRA to a Roth IRA is a good move. The Roth IRA assets can then grow tax free, and the Roth account is not subject to required minimum distributions upon reaching age 72. 
  • Charitable Giving – Do you have a tax-efficient plan for charitable giving? There are many options to consider, including donating cash or appreciated securities, utilizing a donor-advised fund, and making qualified charitable distributions from your IRA.
  • Estate Tax Planning – Check out our article last week that discusses this topic in more detail. There are a few options that could benefit you and help reduce estate taxes by taking action now or before the lifetime exemption is set to drop. 
  • Income Planning – This should be analyzed with your CPA (and we typically recommend doing this before December each year). Is it possible for you to postpone income until 2023 or accelerate deductions in 2022? Either could materially impact your tax bill in the next few years. 
  • Business Owner – Qualified Business Deduction (QBI) – Those businesses operating as S-Corps, Partnerships or Sole Proprietorships may qualify for the 20% deduction on QBI. The deduction amount may be limited based on income thresholds, so consult with your CPA to determine the best strategy. 

While the top four are strategies we can actively manage each year, we’re happy to discuss your broader tax planning strategies as a part of holistic financial planning.


Matt and Andrew