Year End Tax Planning Tips 2023 – Finger Financial Five #148

Jeremy Finger
Jeremy Finger
Table of Contents

“Not all those that wander are not always lost.” – J.R.R. Tolkien

Consider tax-smart strategies for charitable giving.

  • If you are over age 70½, you may be able to distribute funds from an IRA tax-free directly to a qualified charity. This is called a Qualified Charitable Distribution. The limit is $100,000 per IRA owner and this counts as your Required Minimum Distribution.
  • Lumping” multiple years of charitable gifts into one year in order to itemize deductions on that year’s tax return. You may be able to use a Donor Advised Fund to help with this. 

Business owners may be able to transform net operating losses (NOLs) into tax-free income with a Roth IRA conversion

  • Business owners who will record a net operating loss (NOL) this year may be able to use it to their advantage. Unlike net capital losses, where taxpayers can use only $3,000 annually to offset ordinary income, taxpayers can generally apply NOLs against 80% of taxable income. Clients carrying forward large NOLs can use those losses to offset the additional income from a Roth IRA conversion.
  • Consult with a qualified tax professional. 

Consider Roth strategies to hedge the risk of higher taxes in the future

  • Fill up lower tax brackets

Determine marginal tax bracket to drive timing of income (or deductions) at year-end

  • Fund Health Savings Accounts if you qualify. You could get a tax deduction on contributions, tax-free growth, and tax-free withdrawals. For 2023-Families can contribute up to $7,750 +($1000 if over 55 years old). Individuals $3,850 (+$1000 if over 55 years old)
  • Take gains if income is low. There could be zero tax if below certain limits. Under $44,625 for single and $89,250 for joint for 2023.

Tax Loss Harvest

  • Sell an investment in a taxable account at a loss and buy a similar investment. You may be able to use that loss to offset gains taken this year. 

Review Beneficiary designations

  • On IRA accounts

Gifting before year-end

  • $167,000 per person in 2023 without gift tax. 

Gifting in 529 plans

  • Grandparents the annual gifting limit for 2023 is $17,000, and there is a special 529-plan exclusion allows five years’ worth of gifts — up to $85,000 or $170,000 for married couples — to be contributed at once, provided that no other gifts are made within the next five-year period. 
  • You may get a state tax deduction for 529 plan contributions. 
  • These assets are not currently factored as assets for determining federal financial aid under the FAFSA process.
  • However, distributions from these accounts may be counted as part of the income test portion of the financial aid calculation.
  • Recent tax law changes allow 529 account owners to withdraw $10,000 for K–12 tuition expenses and $10,000 to repay student loans, and allow distributions for qualified apprenticeship programs.*
  • If paying for K-12 private school, consider running money through a 529 plan to save on state taxes!

Business owners– Conduct a retirement plan review to see if you can defer more income pre-tax. 

  • If you have a SIMPLE IRA, you can defer up $15,500 in income plus $3,500 if you are over 50 years old. 
  • If you have a SEP IRA, the limits are $66,000 or 25% of compensation, whichever is less.  
  • 401k limits are $22,500 plus $7,500 if over 50 years old. 
  • Cash balance plan could allow additional pretax contributions up to $100,000 or more annually.

Generally, salary deferrals need to be made before December 31st. Employer contributions may be made prior to tax filing deadlines. To see which is best for you, please reach out to us at [email protected] or call 843-970-1049.

Social Security will see a 3.2% increase for 2024. 

Medicare Part B cost will be $174.70/mo for the standard premium in 2024, an increase of $9.80/mo from $164.90 in 2023. 

Let us know if you have any questions! Happy to help! Click here for a phone appointment. 

On the lighter side, to celebrate my 50th birthday last month, my wife and I went to Las Vegas to see Adele and U2 in concert last week. Adele was absolutely fantastic. She could read the phone book and sound great. U2 was at the Sphere, a concert hall that is a giant high-definition TV set. That place was AMAZING!  Check out the short video I took here. See pictures of Adele below (no video because the light would come on).

Oh, Iren and I could not get tickets beside each other at U2. She was a few rows back. Luckily, a single person was sitting beside me and was willing to switch with her. What are the chances of a person sitting by themselves sitting beside me? There are nice people in the world. Lucky us!

Hope all is well with you and your family.


Finger Financial Five – 5 points in 5 minutes or less – is to provide you with a weekly shot of useful financial information.  My intention is to share principles, so that you will have more clarity and peace, that help you make better financial decisions. 

Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor. Stratos Wealth Advisors, LLC and Riverbend Wealth Management are separate entities. This content is developed from sources believed to be providing accurate information and provided by Riverbend Wealth Management. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stratos Wealth Partners and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.


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