The clock is ticking down on 2023. But the year isn’t over yet, and there are still several things you can do to not only prepare for the coming year, but also potentially save you money. So before 2024 hits, consider these end-of-year money moves.
Harvest your tax losses
Investment losses aren’t fun for anyone, but did you know that selling securities at a loss before the year ends could be a benefit on your tax bill? By selling securities at a loss – known as tax loss harvesting – you can write these losses off on your tax bill, and up to $3,000 can be deducted from your yearly ordinary income, and any losses exceeding $3,000 can be carried over to subsequent years for deduction.
Consider gifting
A great way to pass wealth down to future generations while reducing your potential future estate taxes is through gifting. You can give up to $17,0001 to any person this year (twice that amount per couple) without incurring taxes. This means, giving to your children, grandchildren, or other loved ones could be financially beneficial.
It’s also a great time to consider gifting to your favorite charity or nonprofit organization. Most gifts to eligible organizations are tax deductible, but remember, you may have to itemize your gifts to receive the tax benefit.
Gather paperwork
Sure, your taxes won’t be due until April of next year, but that doesn’t mean you can’t prepare early. In fact, it can be a good idea to gather your receipts and paperwork together for itemized deductions, business expenses, and other tax-related items now. Setting aside your 2023 paperwork can make it easier to close out the year and start fresh in 2024.
Update your beneficiaries
Whether for your real estate holdings, retirement accounts, or other assets, it can be a good idea to review and update the beneficiaries on your assets. This is especially true if you’ve had a major life change like the birth of a child or grandchild in the past year. An up-to-date list of beneficiaries can be important because it may determine where your assets go in the case of something unexpected in the coming year. The same goes for your will, which you should also consider reviewing before year-end.
Adjust your withholdings
Tax withholdings are the amount of money withheld from your paycheck every pay period. If you withheld too little on your income thus far on the year, you may need to make an adjustment before the year ends. Ask your employer for a copy of your W-4 form so that you can determine whether it is accurate for the year. By making this adjustment in this calendar year, you can avoid IRS penalties which you could incur with incorrect withholdings.
Start your year-end prep today
Now is a great time to take these financial steps to wrap up the year. If you feel overwhelmed with getting everything done, reach out to us directly to schedule a meeting or ask a question. We’re here to help, every step of the way.
- https://smartasset.com/retirement/ira-contribution-deadline