It’s Not Too Late for Year-End Financial Planning: Maximize Savings, Minimize Taxes, and Prepare for the Year Ahead
Maximize Your Savings and Minimize Your Taxes with Year-End Financial Planning
As the year comes to a close, it’s not too late to take steps to maximize your savings, minimize your taxes, and prepare for the year ahead. One of the most important things you can do is review your finances and identify areas where you can make changes that will have a positive impact on your bottom line. This might include contributing to a retirement account, taking advantage of tax deductions, or making charitable donations. By taking action now, you can set yourself up for financial success in the coming year.
2.Reach your 529 education savings goals with a 2023 contribution-
529 plans are a great way to give the gift of education while reaping tax benefits too. You have until December 31 to contribute to most states’ 529 education plans to qualify for a 529 plan tax deduction or credit.
You can contribute up to $17,000 in 2023 for single filers ($34,000 if married filing jointly) per beneficiary without triggering the federal gift tax.
You may be able to deduct your contributions from your state income tax (or get a state tax credit) depending on where you live.
3. Complete a Roth conversion by December 29, 2023-
You have until the 29th of December to complete a Roth conversion for the 2023 tax year. Roth IRAs offer many benefits—including tax-free growth and tax-free distributions—assuming you’re age 59½ and you’ve held the account for at least 5 years. There are also no RMDs, making it easier to leave a tax-free inheritance to your heirs.
4. Take advantage of charitable giving tax benefits-
Charitable giving offers a way to financially support your favorite charities while enjoying tax benefits that accompany your generosity. For charitable donations made by December 31, 2023, you can deduct up to 60% of your 2023 adjusted gross income (AGI) for cash gifts made to a qualifying charity (which excludes private foundations and supporting organizations). The deduction is usually limited to 30% of your AGI for non-cash contributions such as appreciated stock gifts as well as donations to qualifying private foundations or organizations.
5. Check your financial health-
Year-end is a good time to make sure you’re up to date on the following:
Check out year-end mutual fund estimates for capital gains. Every year at this time, mutual funds announce distributions of realized gains. This could lead result in significant taxable gains you may want to avoid.
If you do have any realized capital gains this year, you may benefit from tax-loss harvesting. If you lock in losses on your stocks that have declined this year, you can use them to offset up to $3,000 in taxable gains you may have.
Are you financially healthy now that you can defer any expected bonuses or year-end income to next year? This may benefit you by lower income tax in 2024.
Check beneficiaries for any desired changes.
We hope these year-end planning tips are helpful. It’s not too late to make money moves or prudent planning changes to effectively close out 2023 and set yourself up for a good start to the new year.
Call me if you have any questions. I am always happy to help!
John J. Gardner, CFP®, CPM®.
Blackhawk Wealth Advisors is the parent corporation of Equity Research & Portfolio Evaluation and Blackhawk Asset Management. It’s Chief Investment Officer is John J. Gardner. John is a Certified Financial Planner (CFP®) and Certified Portfolio Manager (CPM®)
Blackhawk Wealth Advisors employs a collaborative, multi-generational model by using tax efficient and risk mitigation strategies to maintain your current lifestyle while meeting your long term needs and goals. BWA brings together all aspects of your financial life with the expertise of ERPE and BAM.
Blackhawk Asset Management
At BAM, we take the research we obtain from ERPE and utilize it to manage our clients’ assets. Our founder, John Gardner, CFP®, CPM®, offers high net worth investors experienced investment portfolio management based on a disciplined methodology. John is one of the nation's approximately 400 Certified Portfolio Managers and has managed billions of dollars in equity portfolios over his professional career since 1984. He has created four effective, proprietary portfolios: Thematic Growth, Strategic Income, Diversified Value, and Global Opportunity, which have helped clients prosper.
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Equity Research & Portfolio Evaluation
Equity Research & Portfolio Evaluation (ERPE) utilizes its propietary approach in analyzing investments. Its proven success researching equities is based on a blend of fundamental and technical analysis. ERPE's time-tested Top 10 Tenets guide the investment process to achieve Portfolio Optimization: This is through minimizing risk without sacrificing return.
