December 2022
Financial Planning

Year-End Financial Planning Tips

1.    Max Out Your Retirement Plans

• To reduce your earned income, make sure you’ve maximized your contributions. In 2022, the maximum 401k employee contribution is $20,500 ($27,000 if your over age 50).

• Self-employed individuals have even more options—with a SEP IRA or Solo 401k, you can contribute up to $61,000 or 25% of your eligible income.

2.    Analyze Roth IRA Conversion Scenarios

• Consider taking advantage of a down market this year by converting all or some of your IRA to a Roth.

• If you are in a lower tax bracket than when you contributed to the IRA, consider converting just enough before jumping into the next tax bracket.

3.    Complete Your Required Minimum Distributions

• Don’t forget! Must be done before December 31st – 50% penalty awaits if not completed.

• Consider a Qualified Charitable Distribution (QCD) to keep income below certain thresholds. (Taxability of Social Security, Increased Medicare premiums, etc.)

4.    Tax Loss Harvesting

• Capture your losses to offset capital gains or realize loss carryforwards for future gains.

• We also advise you to speak to your CPA regarding tax loss strategies and how they will impact your individual tax situation as this tip does not apply to all tax situations.

5.    Charitable Donations

• Donate appreciated securities.

• Charitable lumping – If you are close to the standard deduction, consider lumping two years of charitable contributions together to be able to itemize deductions and maximize tax savings.

6.    Max Out your HSA Contribution

• If you are eligible to make HSA contributions, consider maxing it out this year. The contribution limits are $3,650 for self-only and $7,300 for families. Those 55 and older can contribute an additional $1,000 as a catch-up contribution.

7.    Contribute to your 529 Plans

• For Utah 529s, a taxpayer who is an account owner may take a Utah state income tax credit on contributions up to certain limits if the beneficiary was younger than age 19 when established as the beneficiary on the account.

• Arizona offers a tax deduction each year for investing in the AZ 529 Plan or any state’s 529 plan of up to $4,000 per beneficiary for married tax filers who file a joint return and up to $2,000 per beneficiary for individual tax filers.

All or some of these tips may apply to you! Before implementing any of these year-end strategies, we would like to meet with you to review the pros and cons to make sure it makes sense for your individual situation. If you haven’t already, reach out to your financial advisor to touch base before year-end.

If you have questions, please contact us.

MARKET UDPATE
FRAUD ALERT
TAX PLANNING
401(K) ALLOCATION

To download the December 2022 Newsletter: CLICK HERE