As the year comes to a close, it’s time to look ahead and prepare for a better financial future. To ensure you’re on the right track, consider these year-end tax planning tips for 2024 and beyond to help you save money and grow your wealth.
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Strategize Roth Conversions Before the End of This Year
- A Roth conversion involves moving money from a traditional retirement account to a Roth account.
- Use tools like the Roth Conversion Explorer and 2024 Roth Conversion Calculator to understand the tax implications and create a conversion strategy for lifelong wealth.
- Simulate different conversion scenarios in the Boldin Retirement Planner to assess the impact on your finances.
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Make Moves Now that Benefit You in the Future
- Plan ahead to minimize future taxes and maximize your savings.
- Explore strategies like Roth conversions, tax loss harvesting, and bundling deductions to reduce taxable income and optimize tax planning.
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Reduce Taxable Income
- Cut your taxable income by finding sources of nontaxable income, using deductions, and claiming tax credits.
- Consider tax loss harvesting, bundling medical and charitable deductions, and maximizing your tax-advantaged savings.
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Beware of the AMT
- Be aware of the Alternative Minimum Tax (AMT) rules to avoid potential tax surprises.
- Accelerating tax deductions could trigger the AMT, so plan carefully to minimize its impact.
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Don’t Forget Your RMDs
- Remember to take Required Minimum Distributions (RMDs) from your retirement accounts to avoid penalties.
- Use the Boldin Retirement Planner to calculate your RMDs and plan for their impact on your finances.
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In a Low Tax Bracket? Pick Up Capital Gains
- Consider selling stocks with significant gains if you’re in a low tax bracket to take advantage of lower capital gains taxes.
- Use strategies like resetting the basis and harvesting losses to optimize your tax situation.
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Pay Attention to the Medicare Surtax and Net Investment Income Tax for High Earners
- Understand the additional Medicare tax and Net Investment Income Tax implications based on your income level.
- Stay below the income thresholds to avoid additional taxes on investments and Medicare.
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65 or Older? Know that You Have a Higher Standard Deduction
- Take advantage of a higher standard deduction if you’re over 65 to reduce your taxable income.
- Utilize the Planner’s federal income tax estimates to maximize your deductions.
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Know How Your Social Security Benefits Are Taxed
- Understand how Social Security benefits are taxed based on your income level.
- Check your projected future tax burden in the Boldin Tax Insights to plan for taxes on Social Security benefits.
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Thinking of Relocating in 2024? Consider the Best States to Retire in for Taxes
- Explore states with favorable tax rates for retirees if you’re planning to relocate for retirement.
- Model different scenarios in the Boldin Retirement Planner to compare estimated tax differences based on your location.
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529 Plans
- Consider the tax benefits of 529 plans for education expenses and state tax credits.
- Allow your contributions to grow in the account for greater tax savings before withdrawing funds.
- Consider Getting Professional Help
- If your tax situation is complex, consider seeking help from a tax professional or CERTIFIED FINANCIAL PLANNERâ„¢.
- Schedule a FREE Discovery Session with a Boldin Advisor to discuss your financial needs and receive expert advice on tax planning.
Prepare for a brighter financial future by implementing these year-end tax planning strategies. By proactively managing your taxes, you can save money, grow your wealth, and secure your financial well-being for the years to come.
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