Retirement Planning | Tax Planning | Wealthy Behaviors

Year-End To-Dos and Financial Housekeeping

Posted on December 7, 2023

Looking ahead to 2024, now is a great time to consider tax strategies in connection with general financial housekeeping. As your trusted one-stop shop for financial services, your Larson team wants to make sure you take advantage of every opportunity to maximize your tax savings while growing your wealth for the future.

Here are several strategies to consider:

Max Out Funding in Your Retirement Accounts

In 2023, you can contribute up to $22,500 to an employer retirement plan. Additionally, if you’re age 50 or older, you can add an extra $7,500 in catch-up contributions. Even though there are only a few weeks left in the year, you can contact your HR department and ask them to accelerate contributions into your 401(k) plan.

And don’t forget about your HSA! Maxing out funding to your HSA is another opportunity which needs to be completed before year-end. Similar to 401(k) plans, there are funding limits. The contribution limit for 2023 is $3,850 for individual coverage and $7,750 for family coverage.[i]

If you have IRA accounts, however, you can continue to fund those accounts for the 2023 calendar year up until April 15th, 2024. The IRA contribution limit is $6,500 per year, with an additional $1,000 catch-up contribution for individuals aged 50 and older. Once the calendar flips to 2024, make sure to specify if you want your contributions to be applied to 2023.

Income Tax Planning

Review your charitable contributions to maximize income tax deductions. Rather than donate cash, consider donating appreciated assets that have been held for over a year. Additionally, consider opening and funding a Donor Advised Fund (DAF). DAFs are appealing to many as they allow for tax-deductible gifts in the current year, while also providing the opportunity to dole out funds to charities over multiple years.

Roth Conversions

During financial check-up meetings, your Larson Advisor analyses your tax-deferred account balances, projected income, and overall tax situation to determine if performing a Roth conversion makes sense. Keep in mind that Roth conversions will be more beneficial when the tax can be paid by funds outside of the IRA. Additionally, remember that all IRA balances are included in the tax calculation of the conversion, limiting the ability to only convert after-tax amounts.

Any Changes?

If you’ve had any major changes in your life this past year, it’s important to keep your Larson Advisor informed. Let us know about any marriages, divorces, births or deaths in the family, job or employment changes, if you have a new address, or any significant planned expenditures (real estate purchases, college tuition payments, home remodeling projects, etc.). Your Larson Advisor will work with you to make sure your financial plan is on track when navigating these events.

The decisions you make each year with your personal finances will have a lasting impact. We hope this information generates insight into what areas of your personal finances may need attention. Please reach out if you have any questions or would like to discuss any of the above items further.


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